<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Selected American Shares Fund, Inc.;
Selected Special Shares Fund, Inc; and
Selected Capital Preservation Trust.
(joint proxy solicitation)
(Name of Registrants as Specified in their Charter)
(Name of Person(s) Filing Proxy Statement., if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------
<PAGE>
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------
3) Filing Party:
-----------------------------------------------------
4) Date Filed:
-------------------------------------------------------
<PAGE>
CONTENTS
1. Shareholder Message
2. Questions and Answers
3. Notice of Special Meeting
4. Proxy Statement
5. Appendices
A: Definitions of Some Terms used in this Proxy
B: Eligible Votes of Each Selected Fund
C: Shareholders owning over 5% of any Fund
And Nominees owning over 1% of any Fund
D: Audit Committee Charter
E: Officers of the Selected Funds, the Adviser, and the Sub-Adviser
F: New Advisory Agreements
G: New Sub-Advisory Agreements
H: Dates that the Existing Advisory and Sub-Advisory Agreements were most
recently submitted to shareholders.
I: Other Investment Companies which Davis Selected Advisers serves as
Investment Adviser
J: Proposed Fundamental Policies
K: Current Fundamental Policies for Each Selected Fund
6. Form of Proxy Card
7. Financial Advisers Letter
<PAGE>
SHAREHOLDER MESSAGE
September 29, 2000
DEAR FELLOW SHAREHOLDER:
A special meeting of shareholders of all Selected Funds will take place on
December 1, 2000, and we are asking for your participation. You do not need to
attend the meeting to participate. It is important that you take a few minutes
to read the enclosed material and then vote your shares. You can vote by
Internet, by telephone, or by mailing the enclosed proxy voting card(s) in the
postage-paid envelope.
EACH SELECTED FUND HAS FOUR PROPOSALS UP FOR A VOTE. SHAREHOLDERS OF ALL
SELECTED FUNDS ARE BEING ASKED TO TAKE ACTION ON THE FOLLOWING ITEMS:
1. Election of the Board of Directors;
2. Approval of new advisory agreements with Davis Selected Advisers, L.P., its
subsidiary Davis Selected Advisers - NY, Inc., and, for Selected Special
Shares, Bramwell Capital Management, Inc.;
3. Approval of proposals that are intended to help the funds increase their
management efficiency by granting them additional investment flexibility;
and
4. Ratification of the selection of KPMG LLP as independent accountants of the
funds.
NONE OF THESE PROPOSALS WILL INCREASE FEES OR CHANGE THE PORTFOLIO MANAGERS FOR
YOUR INVESTMENTS.
The Directors unanimously recommend approving each of the proposals.
No matter how many shares you own, your vote is important. A proxy solicitor,
D.F. King & Co., has been retained to make follow-up phone calls as may be
necessary on behalf of the funds.
Your prompt response will help reduce proxy costs and will also mean that you
can avoid receiving follow-up phone calls or mailings. Voting by Internet or
phone lowers proxy costs even further.
Please join me in exercising your rights as a shareholder by reviewing the
attached materials and casting your vote.
We thank you for your time and attention to this important matter.
Sincerely yours,
James J. McMonagle
Chairman
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS
WHAT ARE SHAREHOLDERS VOTING ON?
Selected Funds are asking shareholders to vote on four proposals:
1. TO ELECT DIRECTORS. Shareholders of each of the Selected Funds are being
asked to elect or re-elect Selected Funds directors. Eight of the 10
directors are independent of the investment adviser.
2. TO RE-APPROVE ADVISORY AND SUB-ADVISORY AGREEMENTS. Shareholders of each
Selected Fund are being asked to re-approve the advisory and sub-advisory
agreements with Davis Selected Advisers, L.P., its wholly owned subsidiary,
Davis Selected Advisers - NY, Inc., and, for Selected Special Shares,
Bramwell Capital Management, Inc. The agreements are not being changed,
fees are not being increased, and the same portfolio managers will be
managing your investments.
3. TO CONSIDER CHANGING OR ELIMINATING CERTAIN INVESTMENT POLICIES. The main
reason for these proposed changes is to allow the Funds a greater degree of
investment flexibility.
4. TO RATIFY SELECTED FUNDS' INDEPENDENT ACCOUNTANTS. Shareholders are being
asked to ratify the directors appointment of KPMG LLP as independent
accountants.
MORE INFORMATION ABOUT THE PROPOSALS
The following tells you more about the proposals and explains the main reasons
that the directors believe the proposals are in the best interests of
shareholders.
WHAT ROLE DO THE DIRECTORS PLAY (PROPOSAL 1)?
The Board of Directors is responsible for protecting the interests of the Funds'
shareholders. The Directors meet regularly to review the Funds' activities,
contractual arrangements and performance. Directors are fiduciaries and have an
obligation to serve the best interests of shareholders, including approving
policy changes such as those proposed in the proxy statement. In addition, the
Directors review Fund performance, oversee Fund activities, and review
contractual arrangements with companies that provide services to the Funds.
WHY ARE SHAREHOLDERS BEING ASKED TO APPROVE ADVISORY AND SUB-ADVISORY AGREEMENTS
(PROPOSAL 2)?
Currently Venture Advisers, Inc. (an entity controlled by Shelby M.C. Davis),
controls, as general partner, Davis Selected Advisers, L.P., which provides
investment advice and administrative services to each of the Selected Funds. On
December 31, 2000, Venture Advisers, Inc., proposes to transfer control of Davis
Selected Advisers, L.P., to Davis Investments, LLC (an entity controlled by
Christopher C. Davis, son of Shelby M.C. Davis), which will become the new
general partner of Davis Selected Advisers, L.P. This will be accomplished
though the sale of 100 general partnership units from Venture Advisers, Inc., to
Davis Investments, LLC. Venture Advisers, Inc., will continue to own
approximately 44% of Davis Selected Advisers, L.P. The 1940 Act requires that
directors and shareholders be asked to approve all advisory and sub-advisory
agreements after a change in control such as this.
Neither the advisory nor the sub-advisory agreements are being changed, no new
fees are being added and no fees are being increased. The same portfolio
managers will continue to manage your investments. Shelby M.C. Davis will
continue as Founder and Senior Research Adviser as described in the current
prospectuses of each Fund.
<PAGE>
WHAT ARE THE REASONS FOR THE PROPOSED CHANGES IN FUNDAMENTAL POLICIES
(PROPOSAL 3)?
Some of the Selected Funds' policies reflect government regulations that no
longer exist. In other cases, limitations are more stringent than current
government regulations require. The Board of Directors believes the proposed
changes in investment policies will benefit shareholders by allowing the
portfolio managers of the Selected Funds to adapt more quickly to future changes
in investment opportunities.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS (PROPOSAL 4)?
The independent accountants act as the Selected Fund's auditors. They review the
Funds' annual financial statements and provide other audit and tax-related
services to the Funds.
HAVE THE DIRECTORS APPROVED EACH PROPOSAL?
Yes. The Directors have unanimously approved all of the proposals and recommend
that you vote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for share you own of a Selected
Fund on the record date. The record date is September 8, 2000.
HOW TO VOTE YOUR SHARES
Voting your shares is easy and will only take a few minutes. You may use any of
the following options, and remember that VOTING BY INTERNET OR PHONE WILL HELP
LOWER PROXY EXPENSES. For Internet and touch-tone telephone voting, you will
need the 12-digit number(s) on your enclosed proxy voting card(s).
o BY INTERNET: Go to the Internet address listed on your proxy card and
follow the instructions.
o BY TOUCH-TONE PHONE: Call toll-free 1-877-779-8683 and follow the recorded
instructions.
o BY FAX: Sign and date the proxy card. Fax both sides of the proxy card to
1-781-575-3957.
o BY MAIL: Mark your votes on the enclosed proxy card, sign your name exactly
as it appears on your latest account statement. Be sure to date, and mail
your vote using the postage-paid envelope provided.
REMEMBER: If you vote by Internet, fax or phone, you should not mail in your
proxy card. Please make sure you vote all the enclosed proxy card(s).
If you have questions on any part of this document, please call our proxy
solicitor, D.F. King, at 1-800-290-6424. A specially trained customer service
representative will be pleased to assist you with any questions or instructions
on how to vote your shares.
The information on these pages is only a summary. Before you vote, please read
the following proxy statement.
It's important to vote as soon as you can.
<PAGE>
NOTICE OF SPECIAL MEETING
TO ALL SHAREHOLDERS OF SELECTED FUNDS: Notice is hereby given that a special
meeting of shareholders of Selected American Shares, Inc., Selected Special
Shares, Inc., and Selected Capital Preservation Trust will be held at 3480 East
Britannia Drive, Tucson, Arizona 85706, on December 1, 2000, beginning at 12
p.m. Pacific Time for the following purposes:
1. To elect directors to hold office until their successors are duly elected
and qualified;
2. To re-approve the advisory and sub-advisory agreements;
3. To eliminate, reclassify or amend certain fundamental investment policies
and restrictions; and
4. To ratify the selection of KPMG LLP as independent accountants.
The close of business on September 8, 2000, was fixed as the record date for
determining which shareholders are entitled to notice of the meeting and any
adjournments thereof and are entitled to vote.
By order of the Board of Directors,
THOMAS TAYS
Secretary
September 29, 2000
<PAGE>
--------------------------------------------------------------------------------
PROXY STATEMENT
PROXY STATEMENT FOR SPECIAL MEETINGS OF SHAREHOLDERS
OF THE FUNDS TO BE HELD ON DECEMBER 1, 2000
SELECTED FUNDS
2949 EAST ELVIRA ROAD, SUITE 101
TUCSON, ARIZONA 85706
--------------------------------------------------------------------------------
INTRODUCTION
PURPOSE OF THIS DOCUMENT
This proxy statement is being furnished to shareholders of each of the Selected
Funds in connection with the solicitation of proxies by and on behalf of the
Board of Directors for use at each Fund's meeting. The meetings will be held at
3480 East Britannia Drive, Tucson, Arizona 85706, on December 1, 2000, beginning
at 12 p.m. Pacific Time. This proxy statement is first being mailed to
shareholders on or about September 29, 2000. Appendix A defines some of the
terms used in this proxy.
WHO MAY VOTE
The Board of Directors has fixed the record date as of the close of business on
September 8, 2000. Only holders of shares of the Funds at the close of business
on the record date are entitled to notice of, and to vote at, the meetings.
Appendix B shows the eligible votes of each Selected Fund. "Eligible votes" is
defined in Appendix A.
Shareholders as of the record date are entitled to one vote for each share, and
each fractional share is entitled to a proportionate share of one vote, upon
each matter properly submitted to the meeting. Shareholders may vote on such
other business as may properly come before the meeting as required by law.
HOW TO VOTE
Shareholders are requested to vote by Internet, phone or by returning the
enclosed proxy cards. Voting by Internet costs the Fund less than if you vote by
telephone or mail. Depending on the number of Funds in which you are a
shareholder and the number of accounts you have, you may receive more than one
proxy card.
If you vote by mail, complete, date, sign and promptly return the enclosed proxy
cards in the accompanying envelope. If you properly execute and return your
proxy cards prior to the meeting, your shares will be
1
<PAGE>
voted in accordance with the instructions marked on the proxy cards. If no
instructions are marked on the proxy cards, the proxies will be voted FOR the
proposals described in this proxy statement.
James McMonagle, Chairman of the Board of Directors, intends to be present at
the meeting. No other Directors intend to present any other business at the
Meeting. If, however, any other matters are properly brought before the Meeting,
the persons named in the accompanying form of proxy will vote thereon in
accordance with their judgment. If you object to our voting other matters on
your behalf, please tell us so in writing before the meeting.
You may revoke your proxy at any time prior to its exercise by voting in person
at the meeting or by submitting, before the meeting, written notice of
revocation or a later-dated proxy.
QUORUM AND VOTING REQUIREMENTS
In order to take action on any proposal (or element of a proposal), a "quorum"
or a majority of the votes entitled to be cast on that proposal must be
represented in person or by proxy.
(sidebar)
FUNDS VOTING ON EACH PROPOSAL
--------------------------------------------------------------------------------
ALL FUNDS VOTING
----------------
PROPOSAL 1: Electing or re-electing current directors.
PROPOSAL 2A: Re-approving advisory and sub-advisory agreements with Davis
Selected Advisers, L.P., and Davis Selected Advisers - NY, Inc.
PROPOSALS 3A THROUGH 3G: Approving a uniform set of fundamental investment
policies.
PROPOSALS 3H THOUGH 3L: Eliminate a variety of obsolete fundamental investment
policies.
PROPOSAL 4: Ratifying the selection of KPMG LLP to serve as the Selected Funds'
independent accountants.
SELECTED SPECIAL SHARES VOTING
------------------------------
PROPOSAL 2B: Re-approving the sub-advisory agreement with Bramwell Capital
Management, Inc.
SELECTED AMERICAN SHARES VOTING
-------------------------------
PROPOSAL 3M: Eliminating a fundamental investment policy regarding associated
persons.
(endsidebar)
PROPOSAL 1:
The ten (10) nominees for the board of directors who receive the highest number
of votes will be elected directors. Selected U.S. Government Income Fund and
Selected Daily Government Fund are the only authorized series of a single
business trust and will jointly elect 10 trustees (referred to throughout this
document as directors). Selected American Shares, Inc., and Selected Special
Shares, Inc., will each elect 10 directors.
PROPOSAL 2:
The new advisory and sub-advisory agreements with Davis Selected Advisers, L.P.,
and its wholly owned subsidiary, Davis Selected Advisers - NY, Inc.; and the
sub-advisory agreement between Davis Selected Advisers, L.P., and Bramwell
Capital Management, Inc., to manage the assets of Selected Special Shares, Inc.,
requires approval of a majority of the eligible votes of each Fund as defined by
the 1940 Act. A majority of eligible votes of a Fund is the affirmative vote of
the lesser of (i) 67% of such votes if the holders of more than 50% of the total
eligible votes of the Fund are represented at the meeting, or (ii) more than 50%
of the total eligible votes of the Fund.
2
<PAGE>
PROPOSAL 3:
The amendment or elimination of certain fundamental investment policies for each
Fund requires the favorable vote of a majority of the eligible vote of a Fund as
defined by the 1940 Act (see description of vote under Proposal 2 above).
PROPOSAL 4:
To ratify the selection of KPMG LLP as independent accountants, the proposal
must receive the affirmative vote of the holders of a majority of the votes
represented at the meeting.
OTHER VOTING-RELATED ISSUES
If a quorum is not present at a meeting, or if sufficient votes to approve a
proposal are not received, the persons named as proxies may propose one or more
adjournments of such meeting to permit further solicitation of proxies. Any
adjournment(s) of a meeting will require the approval of a majority of the votes
of the Selected Funds represented at the meeting.
(sidebar)
IMPORTANT SERVICE PROVIDERS
--------------------------------------------------------------------------------
DAVIS SELECTED ADVISERS, L.P. Serves as adviser to each of the Selected Funds.
DAVIS SELECTED ADVISERS - NY, INC. A wholly owned subsidiary of the Adviser,
provides investment advice to each of the Selected Funds.
BRAMWELL CAPITAL MANAGEMENT, INC. Manages the investment portfolio of Selected
Special Shares.
DAVIS DISTRIBUTORS, LLC. A wholly owned subsidiary of the Adviser, serves as
principal underwriter for each of the Selected Funds.
KPMG LLC. Serves as independent accountants for each of the Selected Funds.
D'ANCONA & PFLAUM. Serves as counsel for each of the Selected Funds and for
their independent directors.
CUSTODIAN. State Street Bank
TRANSFER AGENT. Boston Financial Data Services
The address for Davis Selected Advisers, L.P., and Davis Distributors, LLC, is:
2949 East Elvira Road, Suite 101, Tucson, Arizona 85706. The address for Davis
Selected Advisers - NY, Inc., is: 609 Fifth Avenue, New York, New York 10017.
(end sidebar)
A shareholder vote may be taken on any other matter to come properly before the
meeting prior to such adjournment(s) if sufficient votes to approve such matters
have been received and such vote is otherwise appropriate. The Board of
Directors does not presently know of any matter to be considered at the meeting
other than the matters described in the Notice of Special Meeting accompanying
this proxy statement.
Abstentions and broker "non-votes" (i.e., proxies received from brokers or
nominees indicating that they have not received instructions from the beneficial
owner or other person entitled to vote) will be counted as present for purposes
of determining the presence of a quorum, but will have no effect on any motion
to adjourn or the election of directors (Proposal 1) and will not be counted as
votes FOR Proposals 2 through 4. Accordingly, abstentions and broker non-votes
will have the effect of a vote AGAINST Proposals 2 through 4.
SOLICITATION OF PROXIES
Each Fund has retained D.F. King & Co., Inc., a proxy solicitation firm, to
assist in the solicitation of proxies. The cost of these services will depend
upon the amount and types of services rendered. The Adviser has agreed to pay
75% of the expenses of holding the special meeting of shareholders, including
solicitation of proxies and the Selected Funds will pay 25% of the expenses.
Each Fund will bear its pro rata share of costs of solicitation and expenses
incurred in connection with preparing this proxy statement, including the cost
of retaining a proxy solicitation firm. The Adviser and the Selected Funds also
will reimburse certain parties for their expenses in forwarding proxy materials
to beneficial owners of Fund shares.
3
<PAGE>
In addition to the solicitation of proxies by mail, officers of the Funds and of
the Adviser may also solicit proxies electronically, by telephone, by fax, in
person or by other means.
Additional information about the Selected Funds and their operations may be
found throughout the proxy statement.
SHAREHOLDER REPORTS
Each Fund will furnish, without charge, a copy of its most recent Annual Report
and Semiannual Report, to any shareholder upon request. Shareholders desiring a
copy of such reports should direct all written requests to the Selected Funds,
P.O. Box 8243, Boston, Massachusetts 02266, or should call Selected Funds at
1-800-243-1575.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Selected Funds are not required to hold annual shareholders' meetings, and
none of the Funds intends to do so.
A Fund may hold special meetings as required or as deemed desirable by its Board
of Directors for other purposes, such as changing fundamental policies, electing
or removing directors, or approving or amending an investment advisory
agreement. In addition, special shareholder meetings may be called for Selected
American Shares and Selected Special Shares upon the written request of
shareholders having at least 25% of the eligible votes that could be cast at the
meeting. Special meetings may be called for Selected Capital Preservation Trust
upon the written request of shareholders having at least 10% of the eligible
votes that could be cast at the meeting.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a future shareholder meeting should send their written submissions to the
particular Selected Fund in which they own shares. The address for each Fund is
2949 East Elvira Road, Suite 101, Tucson, Arizona 85706.
Proposals must be received a reasonable time in advance of a proxy solicitation
to be included. Submission of a proposal does not guarantee inclusion in a proxy
statement because the proposal must comply with certain federal securities
regulations.
NOTICE TO BANKS, BROKERS-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Selected Funds in writing whether other persons are the
beneficial owners of the shares for which proxies are being solicited and if so,
the number of copies of the proxy statements, other soliciting material and
Annual Reports (or Semiannual Reports) you wish to receive in order to supply
copies to the beneficial owners of shares. Write in care of the particular
Selected Fund, P.O. Box 8243, Boston, Massachusetts 02266.
4
<PAGE>
PROPOSAL 1:
--------------------------------------------------------------------------------
ELECTION OF DIRECTORS
It is proposed that shareholders of each Selected Fund elect 10 nominees to
serve as directors, each to hold office until a successor is elected and
qualified. All 10 of the nominees currently serve as directors and it is
proposed that they be reelected. The persons named in the accompanying proxies
intend to vote for the election of the persons listed below unless shareholders
indicate on their proxy cards their desire to withhold authority to vote for
elections to office.
Each nominee has consented to being named in this proxy statement and has agreed
to serve as a director if elected. The Board of Directors does not know of any
reason why any nominee would be unable or unwilling to serve as a director, but
if any nominee should become unable to serve prior to the meeting, the proxy
holders reserve the right to vote for another person of their choice as nominee
or nominees. Appendix C lists all shareholders that owned 5% or more of a Fund
and any nominees who owned more than 1% of a Fund. The Selected Funds have no
knowledge as to whether any nominee has the right to acquire beneficial
ownership of shares of a Fund.
INFORMATION ABOUT THE NOMINEES
This table shows basic information about each nominee. Each nominee currently
serves as a Director of each Selected Fund. For purposes of their duties as
directors, the address of each individual listed below is 2949 East Elvira Road,
Suite 101, Tucson, Arizona 85706. Eight of the 10 nominees are Independent
Directors (that is they are not "interested persons" as defined in the 1940
Act). The interested directors are indicated by footnote below.
NAME/BIRTHDATE DIRECTOR SINCE PRINCIPAL OCCUPATION
--------------------------------------------------------------------------------
William P. Barr 1994 DIRECTOR. Executive Vice President
May 23, 1950 and General Counsel, Verizon
(formerly GTE Corporation) since July
1994; Attorney General of the United
States from August 1991 to January
1993; Deputy Attorney General from
May 1990 to August 1991; Assistant
Attorney General from April 1989 to
May 1990; Partner with the law firm
of Shaw, Pittman, Potts & Trowbridge
from 1984 to April 1989 and January
1993 to August 1994.
Floyd A. Brown 1975 DIRECTOR. Retired staff announcer and
November 5, 1930 program host for WGN Radio and
Television, Chicago, Illinois; sole
proprietor of The Floyd Brown Co.,
Elgin, Illinois (advertising, media
production and mass media marketing).
Andrew A. Davis* 1998 DIRECTOR. Director and President or
June 25, 1963 Vice President of each of the Davis
Funds (except Davis International
Series, Inc.), Director and
President, Venture Advisers, Inc.;
President, Davis Investments, LLC;
Director and Vice President, Davis
Selected Advisers - NY, Inc.
5
<PAGE>
NAME/BIRTHDATE DIRECTOR SINCE PRINCIPAL OCCUPATION
--------------------------------------------------------------------------------
Christopher C. Davis* 1998 DIRECTOR. Director and President or
July 13, 1965 Vice President of each of the Davis
Funds; Director, Vice Chairman,
Venture Advisers, Inc.; Sole Member
and Chief Executive Officer, Davis
Investments, LLC; Director, Chairman,
Chief Executive Officer, Davis
Selected Advisers - NY, Inc.;
Chairman and Director, Shelby Cullom
Davis Financial Consultants, Inc.;
Employee of Shelby Cullom Davis &
Co., a registered broker/dealer;
Director, Kings Bay Ltd., an offshore
investment management company
Jerome E. Hass 1997 DIRECTOR. Professor of Finance and
June 1, 1940 Business Strategy, Johnson Graduate
School of Management, Cornell
University; Consultant, National
Economic Research Associates; former
Chief of Division of Economic
Research of the Federal Power
Commission and Special Assistant to
James R. Schlesinger at the Executive
Office of the President of the United
States
Katherine L. MacWilliams 1997 DIRECTOR. Vice President,
January 19, 1956 International Finance, Coors Brewing
Company; former Treasurer, Coors
Brewing Company and Adolph Coors
Company; former Vice President of
Capital Markets for UBS Securities in
New York; former member of the Board
of International Swaps and
Derivatives Association, Inc.
James J. McMonagle 1990 CHAIRMAN AND DIRECTOR. Senior Vice
October 1, 1944 President and General Counsel of
University Hospitals Health System,
Inc., and University Hospitals of
Cleveland; from 1976 to 1990, Judge
of the Court of Common Pleas,
Cuyahoga County, Ohio
Richard O'Brien 1996 DIRECTOR. Corporate Economist for
September 12, 1945 Hewlett-Packard Company; Director,
National Association of Business
Economists; former President of the
Northern California High Technology
Council and former Chairman of the
Economic Advisory Council of the
California Chamber of Commerce
Larry J.B. Robinson 1988 DIRECTOR. General Partner, Robinson
October 28, 1928 Investment Company; Private Investor
and Venture Capitalist; owned J.B.
Robinson Jewelers and radio stations;
Adjunct Professor, Case Western
Reserve University; many non-profit
boards including Cleveland Orchestra;
occasionally foreign correspondent in
Mid East and Balkans. Management
Consultant
Marsha Williams 1996 DIRECTOR. Director of each of the
March 28, 1951 Davis Funds (except Davis
International Series, Inc.); Chief
Administrative Officer, Crate &
Barrel; Director, Modine
Manufacturing, Inc.; Director,
Chicago Bridge & Iron Company, M.V.;
former Vice President and Treasurer,
Amoco Corporation
* Andrew A. Davis and Christopher C. Davis are both owners and officers of the
Adviser and indirect owners of the Principal Underwriter and "interested
persons" of the Funds as defined in the 1940 Act.
6
<PAGE>
DIRECTOR ACTIVITIES AND COMPENSATION
MEETINGS AND COMMITTEES. Each Selected Fund's Board of Directors met four times
in person during calendar year 1999 and has met in person three times through
August 2000 with a total of four in-person meetings scheduled in the year 2000.
In calendar year 1999 Mr. Barr was unable to attend two meetings, all other
Directors attended at least 75% of those meetings.
Each Selected Fund has a Fiduciary & Audit Committee, which is comprised
entirely of Independent Directors (William Barr, Chair; Jerome Hass, James
McMonagle and Marsha Williams). The Fiduciary & Audit Committee reviews
financial statements and other audit-related matters for the Selected Funds. The
Audit Committee also holds discussions with management and with the Independent
Accountants concerning the scope of the audit and the Auditor's independence.
The Audit Committee normally meets twice a year and, if necessary, more
frequently. The Audit Committee met twice during calendar year 1999. Mr. Barr
and Ms. Williams were unable to attend one of the meetings, every other member
of the Fiduciary & Audit Committee attended both meetings. The Audit Committee
has a written charter, attached as Appendix D.
Each Selected Fund also has a Nominating Committee, which is comprised entirely
of Independent Directors (Katherine MacWilliams, Chair, William Barr, James
McMonagle, and Larry J.B. Robinson), which meets as often as deemed appropriate
by the Nominating Committee. As there were no vacancies on the Board, the
Nominating Committee did not meet during calendar year 1999. The Nominating
Committee reviews and nominates persons to serve as members of the Board of
Directors, and reviews and makes recommendations concerning the compensation of
the Independent Directors. The Nominating Committee does not ordinarily consider
nominees recommended by shareholders. However, shareholders may propose nominees
by writing to the Nominating Committee, in care of the secretary of the Selected
Funds, at 2949 East Elvira Road, Suite 101, Tucson, Arizona 85706.
COMPENSATION OF DIRECTORS, OFFICERS AND OTHERS. Directors and officers of the
Selected Funds who are also "interested persons" of the Funds receive no
compensation from the Selected Funds. Officers of the Funds receive no
compensation from the Funds. Each Independent Director (except the Chairman)
currently receives an aggregate quarterly fee of $4,500 from Selected Funds and
an additional aggregate of $2,500 from the Selected Funds for each regular
meeting of the Board of Directors and is reimbursed for all reasonable
out-of-pocket expenses. The Chairman of the Board receives an aggregate
quarterly fee of $9,000 from Selected Funds and an additional aggregate of
$5,000 from the Selected Funds for each regular meeting of the Boards of
Directors and is reimbursed for all reasonable out-of pocket expenses. The
Chairmen of the Fiduciary & Audit Committee, Portfolio & Performance Review
Committee, Marketing Committee, and Nominating Committee each receives an
additional $1,000 per calendar quarter. The compensation paid to each Director
is shown in the table below.
The Selected Funds have a profit sharing plan whereby Directors may elect to
defer current compensation and invest the proceeds in the Selected Funds.
AGGREGATE COMPENSATION FROM THE SELECTED FUNDS
FOR FISCAL YEAR-END DECEMBER 31, 1999
<TABLE>
<CAPTION>
NAME/POSITION SELECTED AMERICAN SELECTED SPECIAL SELECTED CAPITAL TOTAL COMPENSATION
SHARES, INC. SHARES, INC. PRESERVATION TRUST FROM THE FUND COMPLEX
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WILLIAM P. BARR $27,456 $838 $1,206 $29,500
Director
7
<PAGE>
NAME/POSITION SELECTED AMERICAN SELECTED SPECIAL SELECTED CAPITAL TOTAL COMPENSATION
SHARES, INC. SHARES, INC. PRESERVATION TRUST FROM THE FUND COMPLEX
----------------------------------------------------------------------------------------------------------------
FLOYD A. BROWN $29,775 $913 $1,312 $32,000
Director
ANDREW A. DAVIS $0.00 $0.00 $0.00 $0.00
Director
CHRISTOPHER C. DAVIS $0.00 $0.00 $0.00 $0.00
Director
JEROME E. HASS $26,055 $800 $1,145 $28,000
Director
KATHERINE L. MACWILLIAMS $29,775 $913 $1,312 $32,000
Director
JAMES J. MCMONAGLE $52,111 $1,600 $2,289 $56,000
Chairman
RICHARD O'BRIEN $29,775 $913 $1,312 $32,000
Director
LARRY J.B. ROBINSON $23,735 $725 $1,040 $25,500
Director
MARSHA WILLIAMS $21,888 $671 $941 $77,150
Director
</TABLE>
The Board of Directors recommends that you vote FOR each nominee.
8
<PAGE>
PROPOSAL 2:
--------------------------------------------------------------------------------
TO APPROVE OF NEW ADVISORY AGREEMENTS WITH DAVIS SELECTED ADVISERS, INC.; NEW
SUB-ADVISORY AGREEMENTS WITH DAVIS SELECTED ADVISERS - NY, INC.; AND A NEW
SUB-ADVISORY AGREEMENT WITH BRAMWELL CAPITAL MANAGEMENT, INC.
PROPOSAL 2A
The Board of Directors, including the Independent Directors, has approved and
recommends that shareholders of each Selected Fund approve the New Advisory and
Sub-Advisory Agreements with Davis Selected Advisers, L.P. ("Adviser"), and its
wholly owned subsidiary, Davis Selected Advisers - NY, Inc.
PROPOSAL 2B
In addition, the Board of Directors, including the Independent Directors, has
approved and recommends that shareholders of Selected Special Shares, Inc.,
approve the New Sub-Advisory Agreement with Bramwell Capital Management, Inc.
The agreements are not being materially changed, fees are not being increased
and the same portfolio managers will continue managing your investments. The
only reason shareholders are being asked to re-approve the agreements is due to
the proposed change in control.
PROPOSED CHANGE IN CONTROL. Currently Venture Advisers, Inc. (an entity
controlled by Shelby M.C. Davis), as general partner, controls the Adviser that
provides investment advice and administrative services to each of the Selected
Funds. Venture Advisers, Inc., proposes to transfer control of the Adviser to
Davis Investments, LLC, on December 31, 2000. Davis Investments, LLC, is
controlled by Christopher C. Davis, son of Shelby M.C. Davis. Davis Investments,
LLC, will become the new general partner of the Adviser. Venture Advisers, Inc.,
and Davis Investments, LLC, both have the same business address as the Adviser.
Shelby M.C. Davis will continue as Senior Research Adviser and Founder as
described in the current prospectuses of each Selected Fund. The change in
control may be deemed an assignment of the Existing Advisory and Sub-Advisory
Agreements currently in effect for purposes of Section 15(a) of the 1940 Act,
which automatically terminates such agreements.
Venture Advisers, Inc., currently controls the Adviser by owning all of the
general partnership units issued by the Adviser. Venture Advisers, Inc.,
proposes to transfer 100 general partnership units to Davis Investments, LLC.
Immediately thereafter Venture Advisers, Inc., would convert its remaining
general partnership units into limited partnership units. Venture Advisers,
Inc., would continue to own approximately 44% of the economic value of the
Adviser as a limited partner. Davis Investments, LLC, would then own all of the
general partnership units issued by the Adviser, be the general partner and
thereby control the Adviser. Davis Investments, LLC, will pay approximately
$11,000 to Venture Advisers, Inc., as consideration for purchasing general
partnership units.
Christopher Davis is the vice chairman and a director of Venture Advisers, Inc.,
Christopher Davis is also sole member and chief executive officer of Davis
Investments, LLC. Christopher Davis serves as a portfolio manager of Selected
American Shares. Christopher Davis would continue to serve as portfolio manager
after the change in control. Bramwell Capital, Inc., does not anticipate a
change in control at this time. The officers of the Selected Funds, the Adviser,
Davis Selected Advisers - NY, Inc., and Bramwell Capital, Inc., will not change
as a result of the change in control. Officers are listed in Appendix E.
The change in control may be deemed an assignment of the Existing Advisory and
Sub-Advisory Agreements currently in effect for purposes of Section 15(a) of the
1940 Act, which automatically terminates such agreements. Therefore,
shareholders of each Fund are being asked to approve the New Advisory and
Sub-Advisory Agreements with the Adviser and Davis Selected Advisers - NY, Inc.
In addition, shareholders of Selected Special Shares are being asked to approve
the New Sub-Advisory Agreement with Bramwell Capital Management, Inc. If such
approvals are not obtained, the change in
9
<PAGE>
control will be delayed and the Existing Advisory and Sub-Advisory Agreements
will remain in full force and effect.
TERMS OF THE NEW ADVISORY AGREEMENTS. Shareholders of each Fund are being asked
to approve the New Advisory Agreements without material change from the Existing
Advisory Agreements. The following discussion of the New Advisory Agreements is
qualified in its entirety by reference to the form of the New Advisory
Agreements set forth in Appendix F.
As under the Existing Advisory Agreements, the New Advisory Agreements provide
that the Adviser, subject to the general supervision of the Board of Directors,
will provide management and investment advice and will furnish statistical,
executive and clerical personnel, bookkeeping, office space and equipment
necessary to carry out its investment advisory functions and such corporate
managerial duties as are requested by the Board of Directors. The Selected Funds
pay for all expenses of their operations not specifically assumed by the
Adviser. The Board of Directors may arrange for the Adviser to perform any of
the corporate management services necessary or advisable for the operations of
the Selected Funds or contract with another person to perform them. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties, the Adviser will not be subject to
liability to the Selected Funds or any shareholder of the Selected Funds for any
act or omission in the course of, or in connection with, rendering services
thereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.
TERMS OF THE NEW SUB-ADVISORY AGREEMENTS WITH DAVIS SELECTED ADVISERS - NY, INC.
Shareholders are being asked to approve the New Sub-Advisory Agreements without
material change from the Existing Sub-Advisory Agreements. The following
discussion of the New Sub-Advisory Agreements is qualified in its entirety by
reference to the form of the New Sub-Advisory Agreements set forth in Appendix
G. The Adviser, not the Selected Funds, pays for Davis Selected Adviser - NY,
Inc.'s services.
As under the Existing Sub-Advisory Agreements, Davis Selected Advisers - NY,
Inc., a wholly owned subsidiary of the Adviser, located at 609 Fifth Avenue, New
York, New York 10017, agrees to perform research and portfolio management
functions for the Funds on behalf of the Adviser.
Davis Selected Advisers - NY, Inc., performs research and portfolio management
services as requested by the Adviser. Davis Selected Advisers - NY, Inc., is
responsible for complying with stated policies and applicable laws, including
compliance with the Adviser's Code of Ethics. As payment for its services, the
Adviser pays Davis Selected Advisers - NY's reasonable direct and indirect costs
associated with the maintenance of an office and the performance of the terms of
the Agreement and, in addition, an agreed profit margin. The Adviser and not the
Selected Funds pay all the fees paid to Davis Selected Advisers - NY, Inc. The
New Sub-Advisory Agreements will not affect the fees paid by the Selected Funds.
The Adviser and the Board of Directors believe the New Sub-Advisory Agreements
are advantageous to the Selected Funds because they enable the Adviser, through
Davis Selected Advisers - NY, Inc., to continue to attract additional,
experienced personnel to perform services on behalf of the Selected Funds but
who desire to remain in the vicinity of New York City.
TERMS OF THE NEW SUB-ADVISORY AGREEMENT WITH BRAMWELL CAPITAL MANAGEMENT, INC.
Shareholders of Selected Special Shares are being asked to approve the New
Sub-Advisory Agreement without material change from the Existing Sub-Advisory
Agreement. The following discussion of the New Sub-Advisory Agreements qualified
in its entirety by reference to the form of the New Sub-Advisory Agreement set
forth in Appendix G. The Adviser, not Selected Special Shares, pays for Bramwell
Capital Management, Inc.'s services.
As under the Existing Sub-Advisory Agreement, Bramwell Capital Management, Inc.,
located at 745 Fifth Avenue, 16th Floor, New York, New York 10151, agrees to act
as the investment sub-adviser for Selected Special Shares and manage the
investment and reinvestment of the assets of the Fund subject to the supervision
of the Board of Directors and the Adviser. Bramwell Capital Management, Inc., is
responsible for complying with stated policies and applicable laws. As payment
for its services, the Adviser pays
10
<PAGE>
Bramwell Capital Management, Inc., 50% of total management fees paid by Selected
Special Shares to the Adviser, reduced by 50% of any trail commissions paid to
dealers by the Adviser in excess of 25 basis points per annum. The minimum
annual fee is $150,000. The Adviser and not the Selected Funds pay all the fees
paid to Bramwell Capital Management, Inc. The New Sub-Advisory Agreements will
not affect the fees paid by Selected Special Shares.
In the absence of willful misfeasance, bad faith or gross negligence or reckless
disregard of its obligations and duties, Bramwell Capital Management, Inc., will
not be subject to liability to Selected Special Shares or any shareholder for
any act or omission in the course of, or in connection with, rendering services
thereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.
Appendix H lists the date when the Existing Advisory and Sub-Advisory Agreements
were last presented to shareholders for approval and the purpose of the vote.
ADVISORY FEES. No new fees are being added and no fees are being increased. The
advisory fee is calculated and paid monthly and is expressed as an annual
percentage of each Fund's average net assets.
Selected American Shares pays the Adviser a fee at the annual rate based on
average net assets, as follows: 0.65% on the first $500 million; 0.60% on the
next $500 million; 0.55% on the next $2 billion; 0.54% on the next $1 billion;
0.53% on the next $1 billion; 0.52% on the next $1 billion; 0.51% on the next $1
billion; and 0.50% of average net assets in excess of $7 billion. For the year
ended December 31, 1999, Selected American Shares paid the Adviser 0.57% of net
assets for its services.
Selected Special Shares pays the Adviser a fee at the annual rate based on
average net assets, as follows: 0.70% on the first $50 million; 0.675% on the
next $100 million; 0.65% of the next $100 million, and 0.60% on amounts over
$250 million. For the year ended December 31, 1999, Selected Special Shares paid
the Adviser 0.69% of net assets for its services.
Selected U.S. Government Income Fund and Selected Daily Government Fund pay the
Adviser a flat fee at the annual rate of 0.30% of average net assets. For the
year ended December 31, 1999, Selected U.S. Government Income Fund paid the
Adviser 0.42% of net assets. The fee was 0.50% until August 1, 1999, and 0.30%
thereafter. For the year ended December 31, 1999, Selected Daily Government Fund
paid the Adviser 0.30% of net assets for its services.
These fees may be higher than those of most other mutual funds, but are not
necessarily higher than those paid by funds with similar objectives. Under the
Sub-Advisory Agreements with DSA-NY the Adviser pays all of DSA-NY's direct and
indirect costs of operations. The Adviser and not the Funds pay all of the fees
paid to DSA-NY.
Appendix I lists other investment companies with investment objectives similar
to the Selected Funds that the Adviser serves as investment adviser. The Adviser
also serves as sub-adviser to other investment companies with similar investment
objectives. As sub-adviser, the Adviser is not responsible for managing the
investment companies or supervising other service providers and the negotiated
fees reflect this fact.
SHAREHOLDER SERVICES FEES. Pursuant to the Advisory Agreement, the Adviser,
subject to the general supervision of the Funds' Board of Directors, provides
advisory services, which are described above. The Selected Funds bear all
expenses other than those specifically assumed by the Adviser under the Advisory
Agreement, including preparation of its tax returns, financial reports to
regulatory authorities, dividend determinations, transaction and accounting
matters related to its custodian bank, transfer agency, custodial and
shareholder services and qualification of its shares under federal and state
securities laws. Each Selected Fund reimburses the Adviser for providing certain
shareholder services. For the fiscal year ended December 31, 1999, such fees
totaled: Selected American Shares, $128,133; Selected Special Shares, $13,951;
Selected U.S. Government Income Fund, $857; and Selected Daily Income Fund,
$4,822. These services will not be affected by the approval or disapproval of
Proposal 2.
11
<PAGE>
PORTFOLIO TRANSACTIONS. Shelby Cullom Davis & Co. ("SCD") is a broker-dealer who
may be considered an affiliated person of the Adviser because Davis family
members also control it. SCD executes certain brokerage transactions for the
Selected Funds. The Adviser follows procedures designed to ensure that the
commissions paid to SCD are equal to or less than those paid to other brokers in
connection with comparable transactions involving similar securities and that
the commissions charged the Selected Funds by SCD do not exceed commissions
charged to other clients in connection with comparable transactions involving
similar securities. During the year ended December 31, 1999, Selected Special
Shares, Selected U.S. Government Income Fund and Selected Daily Government Fund
did not pay any commissions to SCD. During the same year Selected American
Shares paid $140,159 in commissions to SCD representing 6.23% of the total
commissions paid by the Fund.
EFFECTIVE DATE AND TERMINATION OF THE NEW ADVISORY AND SUB-ADVISORY AGREEMENTS.
If approved by shareholders, the New Advisory and Sub-Advisory Agreements will
take effect immediately upon the change in control and will remain in effect
through January 1, 2003, and thereafter, but only as long as their continuance
is approved at least annually by (i) the vote, cast in person at a meeting
called for the purpose, of a majority of the Independent Directors, and (ii) the
vote of either a majority of the Directors or a majority of the outstanding
shares of the Fund. If the New Advisory and Sub-Advisory Agreements are not
approved, the change in control described above will be delayed while other
options are considered. If Proposal 2 is not approved, the Existing Advisory and
Sub-Advisory Agreements will continue in effect through March 31, 2001, and
thereafter only as long as their continuance is approved at least annually as
described above.
MATTERS CONSIDERED BY THE BOARD
On April 19, 2000, the Board of Directors, including all of the Independent
Directors approved of the Existing Advisory and Sub-Advisory Agreements without
any material changes. At that meeting the Independent Directors were notified of
the proposed change in control.
On July 28, 2000, the Board of Directors, including all of the Independent
Directors approved the New Advisory and Sub-Advisory Agreements following the
change in control and called for a meeting of shareholders to approve the New
Advisory and Sub-Advisory Agreements following the change in control.
In their April 19, 2000, meeting, the Independent Directors reviewed materials
specifically relating to the Existing Advisory and Sub-Advisory Agreements.
These materials included: (i) information on the investment performance of each
Selected Fund compared against a peer group of funds, (ii) sales and redemption
data in respect of each Selected Fund, (iii) information concerning the expenses
of each Selected Fund compared against a peer group of funds, and (iv) The
Adviser's, Davis Selected Advisers - NY, Inc.'s, and Bramwell Capital Management
Inc.'s operations and financial condition. The Directors, including the
Independent Directors, regularly review, among other issues: (i) arrangements in
respect of the distribution of Selected Fund's shares, (ii) the allocation of
each Fund's brokerage, if any, including allocations to brokers affiliated with
the Adviser and the use of "soft" commission dollars to pay Fund expenses and to
pay for research and other similar services, (iii) the Adviser's management of
the relationships with the Selected Funds' third party providers, including
custodian and transfer agents, (iv) the resources devoted to and the record of
compliance with the Selected Funds' investment policies and restrictions and
with policies on personal securities transactions, and (v) the nature, cost and
character of non-investment management services provided by the Adviser and its
affiliates.
In their July 28, 2000, meeting, the Independent Directors considered the New
Advisory and Sub-Advisory Agreements, including: (i) Davis Selected Advisers,
Inc., Davis Selected Advisers - NY, Inc., and Bramwell Capital Management, Inc.,
do not anticipate any material changes in their operations as a result of the
proposed change in control, (ii) the Funds would continue to be managed by the
same portfolio managers, (iii) Shelby M.C. Davis will continue as Senior
Research Adviser and Founder as described in the current prospectus, (iv) Davis
Selected Advisers, L.P.'s, Davis Selected Advisers - NY, Inc.'s, and Bramwell
Capital Management, Inc.'s senior management will not change as a result of the
change in
12
<PAGE>
control, and (v) the advisory and sub-advisory agreements will be materially
unchanged, including no new fees and no increase in fees. The Directors
discussed whether any additional information was needed and concluded that it
was not.
CONCLUSION. In considering the Existing Advisory and Sub-Advisory Agreements in
the April meetings and the New Advisory and Sub-Advisory Agreements in July, the
Board of Directors and the Independent Directors did not identify any single
factor as all-important or controlling. Based on their evaluation of all
material factors and assisted by the advice of independent counsel, the
Directors and Independent Directors concluded that the New Advisory and
Sub-Advisory Agreements are fair and reasonable and that they should be approved
without material change following the change in control.
The Board of Directors, including the Independent Directors, voted to approve
the submission of the New Advisory and Sub-Advisory Agreements to shareholders
of the Selected Funds and recommends that shareholders vote FOR Proposal 2.
13
<PAGE>
PROPOSAL 3:
--------------------------------------------------------------------------------
ELIMINATING OR AMENDING FUNDAMENTAL
INVESTMENT POLICIES AND RESTRICTIONS
BACKGROUND
Each Selected Fund operates in accordance with the investment objectives,
policies and restrictions described in its prospectus and Statement of
Additional Information.
The Selected Funds generally classify their investment policies as either
"fundamental" or "non-fundamental." A fundamental policy may be changed only by
shareholder vote, while non-fundamental policies may be changed by vote of a
Fund's Board of Directors. The 1940 Act requires mutual funds to classify only
certain policies as fundamental. With this proposal, the Selected Funds seek to
modernize their fundamental policies and gain greater investment flexibility by
adopting a set of uniform fundamental investment policies. A copy of the
proposed uniform fundamental investment policies is included in Appendix J.
Adopting the proposed uniform fundamental investment policies involves restating
certain fundamental policies and eliminating other, unnecessary fundamental
policies.
Since the time each Fund was created, there have been a number of changes in the
laws and regulations that govern the Funds. For example, significant federal
legislation in 1996 pre-empted state regulation of all mutual funds. As a
result, many investment policies previously imposed on the Selected Funds by
various states are no longer required.
Recently, the Adviser performed a comprehensive review of the Selected Funds'
fundamental and non-fundamental policies. Based on the recommendations of the
Adviser, the Board of Directors has approved policy revisions that are designed
to simplify and modernize those policies that are required to be fundamental and
eliminate those policies that are not required under the law.
If each element of Proposal 3 is approved, each of the Selected Funds will have
a uniform set of fundamental policies. Each of the Selected Funds may adopt any
number of non-fundamental policies that the Board of Directors can change or
eliminate without the expense and delay of holding a shareholder meeting. After
the results of the shareholders meetings are known, the Board of Directors will
consider which non-fundamental policies should be adopted.
Approval of these changes by shareholders would allow the Adviser greater
flexibility to respond to a changing investment environment, subject to the
supervision of the Board of Directors and consistent with legal requirements,
including published SEC staff positions. The Adviser believes that the proposed
changes will enhance its ability to manage the Selected Funds' investment
portfolios.
Each proposed change to a Fund's fundamental policies recommended by the Board
of Directors is discussed in detail below. The exact language of each
fundamental policy is presented, often followed by further discussion of the
policy. If approved, the fundamental policy could not be changed again without a
shareholder vote. The discussion following the fundamental policy could be
changed by the Board of Directors without a shareholder vote to reflect changes
in the governing law. In order to help you understand the proposed changes, we
have attached Appendices J and K to this proxy statement. Appendix J shows the
proposed uniform fundamental polices that each of the Selected Funds would
adopt. Appendix K shows each Selected Fund's current fundamental policies
proposed to be replaced by new fundamental policies or eliminated.
14
<PAGE>
VOTING REQUIREMENTS
Approval of each element of Proposal 3 requires the favorable vote of a majority
of the eligible votes of a Fund as defined by the 1940 Act. Proposal 3 is
separated into elements specific to each type of fundamental policy involved,
e.g., diversification, borrowing and concentration. You may vote separately for
or against each element of Proposal 3.
If shareholders of a Fund approve some, but not all, elements of Proposal 3, the
Fund will have a combination of certain current fundamental policies and certain
new fundamental policies. The Funds intend to implement new policies after the
meeting, as soon as practicable.
The Board of Directors recommends that you vote FOR Proposal 3 and all its
elements.
PROPOSAL 3A:
--------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING DIVERSIFICATION
Each of the Selected Funds is currently diversified. If this element of Proposal
3 is adopted each of the Funds would each have greater investment flexibility
yet remain diversified mutual funds. This would not result in a material change
in the investment strategy of either Selected U.S. Government Income Fund or
Selected Daily Government Fund. Appendix K shows each Selected Fund's current
fundamental policy.
Proposal 3A would give Selected American Shares and Selected Special Shares
greater investment flexibility by permitting the Funds to acquire larger
positions in the securities of individual companies. The Adviser believes that
this increased flexibility may provide opportunities to enhance investment
performance. At the same time, investing a larger percentage of a Fund's assets
in a single issuer's securities increases the Fund's exposure to risks
associated with that issuer's financial condition and business operations. The
Adviser will use the increased flexibility to invest more than 5% of a Fund's
total assets in an issuer's securities only when it believes the securities
potential return justifies accepting the risks associated with the higher level
of investment.
THE NEW FUNDAMENTAL POLICY ON DIVERSIFICATION FOR ALL SELECTED FUNDS WOULD BE:
Diversification. The Fund may not make any investment that is inconsistent with
its classification as a diversified investment company under the 1940 Act.
Further Explanation of Diversification Policy. To remain classified as a
diversified investment company under the 1940 Act, the Fund must conform with
the following: With respect to 75% of its total assets, a diversified investment
company may not invest more than 5% of its total assets, determined at market or
other fair value at the time of purchase, in the securities of any one issuer,
or invest in more than 10% of the outstanding voting securities of any one
issuer determined at the time of purchase. These limitations do not apply to
investments in securities issued or guaranteed by the United States ("U.S.")
government or its agencies or instrumentalities.
PROPOSAL 3B:
--------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING CONCENTRATION
Each of the Selected Funds is prohibited from concentrating their investments in
a specific industry by investing 25% or more of their assets in companies
considered to be in the same industry. The proposed uniform language would not
affect the Funds' current investment strategy, but their replacement with a more
flexible fundamental policy could provide investment flexibility in the future.
Appendix K shows each Fund's current fundamental policy. A fund that
concentrates its investments in a single industry may be subject to greater
risks than a fund that does not concentrate its investments. The fund's
investment
15
<PAGE>
performance, both good and bad, may be expected to reflect the economic
performance of the industry in which it concentrates. The Adviser believes that
this increased flexibility may provide opportunities to enhance investment
performance. At the same time, investing a larger percentage of a Fund's assets
in a specific industry increases the Fund's exposure to risks associated with
that industry's financial condition and business operations. The Board of
Directors believes that approval of this element of Proposal 3 is in the best
interests of the Funds and their shareholders.
THE NEW FUNDAMENTAL POLICY ON CONCENTRATION FOR ALL SELECTED FUNDS WOULD BE:
Concentration. The Fund may not concentrate its investments in the securities of
issuers primarily engaged in any particular industry.
Further Explanation of Concentration Policy. The Fund may not invest 25% or more
of its total assets, taken at market value, in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities).
PROPOSAL 3C:
--------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES
REGARDING SENIOR SECURITIES
Currently, each of the Selected Funds has a fundamental policy governing the
issuance of senior securities that is more restrictive than the 1940 Act
currently allows. Selected American Shares and Selected Special Shares are both
limited to 5% of total assets while Selected U.S. Government Income Fund and
Selected Daily Government Fund are both restricted from issuing any senior
securities. Appendix K shows each Fund's current fundamental policy. The
proposed uniform language would not affect the Funds' current investment
strategy but their replacement with a more flexible fundamental policy could
provide investment flexibility in the future. The Adviser believes that this
increased flexibility may provide opportunities to enhance investment
performance. At the same time, issuing a larger percentage of senior securities
could have the effect of leveraging a Fund's investment portfolio, increasing
the potential for both gains and losses. A short sale involves borrowing a
security that the Fund does not currently own and selling it in the hope of
buying it back later at a lower price. The Fund would suffer a loss if the
security increased in value after the Fund sold it short and before it bought it
back. The Board of Directors believes that approval of this element of Proposal
3 is in the best interests of the Funds and their shareholders.
THE NEW FUNDAMENTAL POLICY ON ISSUING SENIOR SECURITIES FOR ALL SELECTED FUNDS
WOULD BE:
Issuing Senior Securities. The Fund may not issue senior securities, except as
permitted under applicable law, including the 1940 Act and published SEC staff
positions.
Further Explanation of Issuing Senior Securities. The Fund may not issue senior
securities nor sell short more than 5% of its total assets, except as provided
by the 1940 Act and any rules, regulations or orders issued thereunder. This
limitation does not apply to selling short against the box. The 1940 Act defines
a "Senior Security" as any bond, debenture, note, or similar obligation
constituting a security and evidencing indebtedness.
PROPOSAL 3D:
--------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING BORROWING
The current fundamental policy regarding borrowing by each Selected Fund is more
restrictive than required by the 1940 Act. It is proposed that each Selected
Fund adopt a new fundamental policy regarding borrowing that provides more
flexibility. Appendix K shows each Selected Fund's current fundamental policy.
16
<PAGE>
This element of Proposal 3 would increase the borrowing limits for each of the
Selected Funds. The current policies limit borrowings to 10% of total assets and
do not allow the funds to purchase additional portfolio securities with borrowed
money. The proposed policies would allow the Funds to borrow up to the 1940 Act
limit (currently 33 1/3% of total assets measured after the borrowing, plus an
additional 5% from any source, for a total of 38 1/3%) and not allow the funds
to purchase additional portfolio securities if borrowing exceeds 5% of total
assets. This prevents the Funds from borrowing money for the purpose of
leveraging their portfolios. The expanded borrowing limits may be useful in a
number of situations, such as to meet unanticipated redemptions without selling
portfolio securities at disadvantageous prices. Borrowing money to meet
redemptions rather than immediately selling portfolio securities would have the
effect of temporarily leveraging a fund's assets and potentially exposing the
fund to leveraged losses. The Adviser believes that this more flexible
fundamental borrowing policy is in the best interests of the funds and their
shareholders because it will allow the Selected Funds, subject to approval by
the Board of Directors, to adapt to future developments in investment practices
and changes in the governing laws and regulations without the delay and cost of
a shareholder meeting.
THE NEW FUNDAMENTAL POLICY ON BORROWING FOR ALL SELECTED FUNDS WOULD BE:
Borrowing. The Fund may not borrow money, except to the extent permitted by
applicable law, including the 1940 Act and published SEC staff positions.
Further Explanation of Borrowing Policy. The Fund may borrow from banks and
enter into reverse repurchase agreements in an amount up to 33 1/3% of its total
assets, taken at market value. The Fund may also borrow up to an additional 5%
of its total assets from banks or others. The Fund may borrow only as a
temporary measure for extraordinary or emergency purposes such as the redemption
of Fund shares. The Fund may purchase additional securities so long as
borrowings do not exceed 5% of its total assets. The Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities. In the event that market fluctuations cause borrowing
to exceed the limits stated above, the Adviser would act to remedy the situation
as promptly as possible (normally within 3 business days), although it is not
required to dispose of portfolio holdings immediately if the Fund would suffer
losses as a result.
PROPOSAL 3E:
--------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING UNDERWRITING
Each of the Selected Funds currently has a fundamental policy that prevents it
from engaging in the underwriting of securities, except in connection with the
disposition of securities from its investment portfolio. Appendix K shows each
Selected Fund's current fundamental policy. Underwriting securities can result
in losses due to the volatility of equity markets. The Funds have not engaged in
underwriting in the past and do not intend to do so regardless of whether or not
this element of Proposal 3 is approved. Replacing the current fundamental policy
with a more flexible fundamental policy could provide investment flexibility in
the future by allowing the Board of Directors to adopt appropriate policies
without the time and expense of holding a meeting of shareholders. Accordingly,
the Board of Directors believes that approval of this element of Proposal 3 is
in the best interests of the Funds and their shareholders.
THE NEW FUNDAMENTAL POLICY ON UNDERWRITING FOR ALL SELECTED FUNDS WOULD BE:
Underwriting. The Fund may not underwrite securities of other issuers, except to
the extent permitted by applicable law, including the 1940 Act and published SEC
staff positions.
Further Explanation of Underwriting Policy. The Fund may not underwrite
securities of other issuers, except insofar as the Fund may be deemed to be an
underwriter in connection with the disposition of its portfolio securities.
17
<PAGE>
PROPOSAL 3F:
--------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES
REGARDING INVESTMENTS IN COMMODITIES AND REAL ESTATE
The 1940 Act requires every mutual fund to adopt a fundamental policy regarding
investment in commodities and real estate. Each of the Selected Funds' current
fundamental policy restricting investments in commodities and real estate is
more restrictive than required by the 1940 Act.
Appendix K shows each Selected Fund's current fundamental policy.
Proposal 3F would adopt a new fundamental policy restricting investments in
commodities and real estate that provides more flexibility. Neither the current
nor the proposed fundamental policy prevents the equity funds from investing in
securities issued by real estate companies. Investments in commodities can be
volatile and are often leveraged. Direct investments in real estate and minerals
(as opposed to investing in securities issued by real estate or natural resource
companies) can be illiquid. The Selected Funds do not intend to change their
investment strategies and invest in either commodities or directly in real
estate as a result of a change in this policy. The Adviser believes that this
more flexible fundamental policy restricting investments in commodities and real
estate is in the best interests of the funds and their shareholders because it
will allow the Selected Funds, subject to approval by the Board of Directors, to
adapt to future developments in investment practices and changes in the
governing laws and regulations without the delay and cost of a shareholder
meeting.
THE NEW FUNDAMENTAL POLICY FOR ALL SELECTED FUNDS REGARDING INVESTMENTS IN
COMMODITIES AND REAL ESTATE WOULD BE:
Investments in Commodities and Real Estate. The Fund may not purchase or sell
commodities or real estate, except to the extent permitted by applicable law,
including the 1940 Act and published SEC staff positions.
Further Explanation of Policy Restricting Investments in Commodities and Real
Estate. The Fund may purchase or sell financial futures contracts, options on
financial futures contracts, currency contracts, and options on currency
contracts as described in its prospectus and Statement of Additional
Information. The Fund may not purchase or sell real estate, except that the Fund
may invest in securities that are directly or indirectly secured by real estate,
or securities issued by issuers that invest in real estate.
PROPOSAL 3G:
--------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING MAKING LOANS
The 1940 Act requires every mutual fund to adopt a fundamental policy regarding
making loans. Each of the Selected Funds' current fundamental policy restricting
making loans is more restrictive than required by the 1940 Act. Currently
Selected American Shares, Selected Special Shares, and Selected U.S. Government
Income Fund may not lend money but may engage in securities lending. Currently
Selected Daily Government Fund may neither lend money nor engage in securities
lending. Appendix K shows each Fund's current fundamental policy. It is proposed
that each Selected Fund adopt a new fundamental policy restricting making loans,
which provides more flexibility. Even Funds that do not pursue current income as
an investment objective may benefit from the incremental income earned from
activities such as stock lending. This additional income may offset a portion of
the Fund's operational expenses. Lending money or securities involves the risk
that a Fund may suffer a loss if a borrower does not repay a loan when due. To
manage this risk the Selected Funds deal only with counter-parties they believe
to be creditworthy and require that the counter-party deposit collateral with
the Funds.
18
<PAGE>
THE NEW FUNDAMENTAL POLICY FOR ALL SELECTED FUNDS REGARDING MAKING LOANS WOULD
BE:
Making Loans. The Fund may not make loans to other persons, except as allowed by
applicable law, including the 1940 Act and published SEC staff positions.
Further Explanation of Lending Policy. The acquisition of investment securities
or other investment instruments is not be deemed to be the making of a loan.
To generate income and offset expenses, the Fund may lend portfolio securities
to broker-dealers and other financial institutions that the Adviser believes to
be creditworthy in an amount up to 33 1/3% of its total assets, taken at market
value. While securities are on loan, the borrower will pay the Fund any income
accruing on the security. The Fund may invest any collateral it receives in
additional portfolio securities, such as U.S. Treasury notes, certificates of
deposit, other high-grade, short-term obligations or interest-bearing cash
equivalents. The Fund is still subject to gains or losses due to changes in the
market value of securities that it has lent.
When the Fund lends its securities, it will require the borrower to give the
Fund collateral in cash or government securities. The Fund will require
collateral in an amount equal to at least 100% of the current market value of
the securities lent, including accrued interest. The Fund has the right to call
a loan and obtain the securities lent any time on notice of not more than five
business days. The Fund may pay reasonable fees in connection with such loans.
PROPOSAL 3H:
--------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICY
REGARDING PLEDGING, MORTGAGING AND HYPOTHECATION
Each of the Selected Funds currently has fundamental policies limiting the
Fund's ability to pledge, mortgage or hypothecate their assets. The Funds use
their assets as collateral when they borrow money (see Proposal 3D regarding
borrowing money). Appendix K shows each Selected Fund's current fundamental
policy. Each Fund's current fundamental policy is based on requirements imposed
by the administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds and the sale of their shares and the 1940 Act does not require the current
fundamental policy. Pledging fund assets creates a risk that the borrower will
keep those assets in the event that the Fund fails to repay any loans of which
the assets are used to collateralize. The current fundamental policies may limit
the Funds' ability to borrow money because they could not offer lenders
sufficient collateral. The Adviser believes that the risk of losing pledged
securities is a reasonable risk to assume to ensure the Funds' ability to borrow
money when necessary. Accordingly, the Board of Directors believes that
elimination of the current fundamental policies regarding pledging, mortgaging
and hypothecation is in the best interests of the Selected Funds and their
shareholders.
19
<PAGE>
PROPOSAL 3I:
--------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICY
REGARDING INVESTMENTS IN OPTIONS AND FUTURES CONTRACTS
The Selected Funds' current fundamental policies limit the Funds' ability to
purchase or sell put and call options. Selected U.S. Government Income Fund's
current fundamental policy also limits its ability to purchase or sell futures
contracts. Appendix K shows each Selected Fund's current fundamental policy.
Each Fund's current fundamental policy is based on requirements imposed by the
administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds and the sale of their shares and the 1940 Act does not require the current
fundamental policy. Investing in options can involve substantial risks,
including the potential loss of the entire premium paid when purchasing options
and a potentially unlimited risk when selling options without owning the
underlying securities. Purchasing and selling futures contracts can also involve
potentially unlimited risk if not engaged in as a hedging strategy. If this
policy is eliminated and the Adviser determines it is advisable to so invest,
shareholders would have a greater exposure to these risks. Because the Adviser
does not currently intend to engage in material purchases or sales of options,
it does not believe that elimination of the current fundamental policy would
materially increase the risks to the Selected Funds or their shareholders. In
the future, if the Adviser deemed it advisable to engage in purchases or sales
of options, it would only do so in conformance with the Funds' then current
registration statement. Accordingly, the Board of Directors believes that
elimination of the current fundamental policies regarding investment in options
is in the best interests of the Selected Funds and their shareholders.
PROPOSAL 3J:
--------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICY
REGARDING INVESTMENTS IN OTHER INVESTMENT COMPANIES
The Selected Funds' current fundamental policies limit the Funds' ability to
invest in other registered investment companies. Appendix K shows each Selected
Fund's current fundamental policy. Each Fund's current fundamental policy is
based on requirements imposed by the administrators of securities laws in
various states. However, federal legislation passed in 1996 preempted
substantive state regulation of mutual funds. Investment in shares of other
investment companies is specifically addressed by section 12(d)(1) of the 1940
Act and is further limited for money market funds by Rule 2a-7. The 1940 Act
generally limits a fund to (i) purchasing 3% of the total outstanding voting
stock of a single other investment company, (ii) investing 5% of its total
assets in the securities of a single other investment company, and (iii)
investing 10% of its total assets in securities of all other investment
companies.
Rule 2a-7 imposes additional limitations on the money market funds' investments
in other investment companies because Rule 2a-7 limits money market fund
investments to high quality instruments that present minimal credit risk.
Accordingly, money market funds generally may only invest in other investment
companies if the investment companies are money market funds.
Elimination of the current fundamental policy will allow each Fund to invest in
other investment companies to the extent permitted by the 1940 Act. To the
extent a Fund invests in shares of other investment companies, shareholders may
indirectly bear a portion of the expenses of the investment companies in which
the Fund invests. These expenses would be in addition to the expenses directly
by the Fund and, to some extent, may be duplicative. The investment adviser will
take these expenses into account prior to deciding that such an investment is
suitable for a fund and its shareholders.
The Adviser does not believe that elimination of the current fundamental policy
would materially increase the risks to the Selected Funds or their shareholders
both because the Adviser has no current intention to invest in other investment
companies and also because of the 1940 limitations. The Board of Directors
believes that elimination of the current fundamental policies regarding
investment in other investment companies is in the best interests of the
Selected Funds and their shareholders.
20
<PAGE>
PROPOSAL 3K:
--------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICIES
REGARDING SHORT SELLING AND MARGIN
The Selected Funds' current fundamental policies limit the Funds' ability to
sell short or buy on margin. Appendix K shows each Selected Fund's current
fundamental policy. Each Fund's current fundamental policy is based on
requirements imposed by the administrators of securities laws in various states.
However, federal legislation passed in 1996 preempted substantive state
regulation of mutual funds and the sale of their shares and the 1940 Act does
not require the current fundamental policy. A short sale involves borrowing a
security that the Fund does not currently own and selling it in the hope of
buying it back later at a lower price. The Fund would suffer a loss if the
security increased in value after the Fund sold it short and before it bought it
back. Selling securities short theoretically incurs the risk of unlimited
losses. Buying on margin involves borrowing money to purchase additional
securities. Using margin risks leveraging the investment portfolio, which can
magnify both gains and losses. Because the Adviser does not currently intend to
engage in either of these activities, it does not believe that elimination of
the current fundamental policy would materially increase the risks to the
Selected Funds or their shareholders. In the future, if the Adviser deemed it
advisable to engage in short selling or margin, it would only do so in
conformance with the Funds' then current registration statement. Accordingly,
the Board of Directors believes that elimination of the current fundamental
policies regarding short selling and margin is in the best interests of the
Selected Funds and their shareholders.
PROPOSAL 3L:
--------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE FUNDAMENTAL POLICY
REGARDING INVESTMENTS IN ILLIQUID SECURITIES AND REPURCHASE AGREEMENTS
Each of the Selected Funds have fundamental policies prohibiting the Fund from
purchasing more illiquid securities if, after the purchase, more than a stated
value of the Fund's net assets would be invested in illiquid securities.
Selected American Shares and Selected Special Shares are each limited to 15% of
net assets. Selected U.S. Government Income Fund and Selected Daily Government
Fund are each limited to 10% of total assets. Selected U.S. Government Income
Fund and Selected Daily Government Fund also currently have fundamental
investment policies prohibiting the Funds from entering into repurchase
agreements maturing in more than seven days if, as a result, more than 10% of
the value of the Fund's total assets would be invested in such securities. The
Adviser considers repurchase agreements maturing in more than seven days to
simply be another form of illiquid security, and thus, a separate fundamental
policy dealing specifically with repurchase agreements is unnecessary. Appendix
K shows each Fund's current fundamental policy.
The Funds' current fundamental policies are based on requirements imposed by the
administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds and the sale of their shares and the 1940 Act does not require the current
fundamental policy. Current SEC rules, which have changed in the past and may be
changed in the future, limit a mutual fund's investment in illiquid securities
to not more than 15% of total assets. If this element of Proposal 3 is approved
each of the Selected Funds intend to adopt a non-fundamental policy limiting
investments in illiquid securities to no more than 15% (10% for Selected Daily
Government Fund) of the value of total assets. In the event the Fund's illiquid
holdings exceeded 15% (10% for Selected Daily Government Fund) of its assets
(perhaps due to market appreciation) the Adviser would act promptly to remedy
the situation as promptly as possible, although it is not required to dispose of
portfolio holdings immediately if the Fund would suffer losses as a result.
Because the Selected Funds intend to adopt the non-fundamental policy described
above, the Adviser does not believe that elimination of the current fundamental
policy would materially increase the risks to the
21
<PAGE>
Selected Funds or their shareholders. Approval of this element of Proposal 3
would allow the Board of Directors to take appropriate and timely action to
adopt or amend a non-fundamental policy without the expense and delay associated
with a shareholder meeting. Accordingly, the Board of Directors believes that
approval of this element of Proposal 3 would be in the best interests of the
Selected Funds and their shareholders.
PROPOSAL 3M:
--------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE SELECTED AMERICAN SHARES' FUNDAMENTAL POLICY REGARDING
INVESTMENTS IN COMPANIES WITH AFFILIATED PERSONS
Selected American Shares' current fundamental policy limits the Fund's ability
to purchase securities of issuers whose securities are owned by officers or
directors of the Funds or by the Adviser. Appendix K shows Selected American
Shares' current fundamental policy.
The 1940 Act does not require mutual funds to adopt fundamental policies
regarding investments in companies with affiliated ownership. Each Fund's
current fundamental policy is based on requirements imposed by the
administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds and the sale of their shares. This fundamental policy was intended to
prevent potential conflicts of interest and self-dealing. Because the Selected
Funds invest primarily in established companies, it is unlikely that any of the
Funds' officers or directors would own 1/2 of 1 percent or more of a company
that the Funds would invest in, or that the Fund's officers and directors would,
in aggregate own 5% or more of a company that the Funds would invest in.
Moreover, the Adviser believes that even if such cross ownership existed, it is
unlikely that such ownership actually would result conflicts of interest or
self-dealing. The Adviser believes that the burden of the paperwork that the
current fundamental policy imposes exceeds any potential benefits. Accordingly,
the Board of Directors believes that approval of this element of Proposal 3
would be in the best interests of the Selected Funds and their shareholders.
22
<PAGE>
PROPOSAL 4:
--------------------------------------------------------------------------------
TO RATIFY THE SELECTION OF KPMG LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUNDS
By a vote of the Independent Directors, the firm of KPMG LLP has been selected
as independent accountants for each of the Selected Funds to sign or certify any
financial statements of each Fund required by any law or regulation to be
certified by an independent accountant and filed with the SEC or any state.
Pursuant to the 1940 Act, such selection requires the ratification of
shareholders. In addition, as required by the 1940 Act, the vote of the
Directors is subject to the right of the Selected Funds, by vote of a majority
of their eligible votes at any meeting called for the purpose of voting on such
action, to terminate such employment without penalty. KPMG LLP has advised the
Selected Funds that to the best of its knowledge and belief, as of the record
date, no KPMG LLP professional had any direct or material indirect ownership
interest in the Selected Funds inconsistent with the independence standards
pertaining to accountants.
The independent accountants examine annual financial statements for the Selected
Funds and provide other audit and tax-related services. In recommending the
selection of the Selected Fund's accountants, the Audit Committee reviewed the
nature and scope of the services to be provided (including non-audit services)
and whether the performance of such services would affect the accountants'
independence. Representatives of KPMG LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
LIST OF APPENDICES
APPENDIX A: Definitions of Some Terms used in this Proxy
APPENDIX B: Eligible Votes of Each Selected Fund
APPENDIX C: Nominees owning over 1% of any Fund
and Shareholders owning over 5% of any Fund
APPENDIX D: Audit Committee Charter
APPENDIX E: Officers of the Selected Funds, the Adviser, Davis Selected
Advisers - NY, Inc., and Bramwell Capital Management, Inc.
APPENDIX F: New Advisory Agreements
APPENDIX G: New Sub-Advisory Agreements
APPENDIX H: Dates that the Existing Advisory and Sub-Advisory Agreements
were most recently submitted to shareholders
APPENDIX I: Other Investment Companies which
Davis Selected Advisers serves as Investment Adviser
APPENDIX J: Proposed Fundamental Policies
APPENDIX K: Current Fundamental Policies for Each Selected Fund
<PAGE>
APPENDIX A:
--------------------------------------------------------------------------------
DEFINITIONS OF SOME TERMS USED IN THIS PROXY
1940 ACT: The Investment Company Act of 1940 and the rules and regulations
thereunder.
ADVISER: Davis Selected Advisers, L.P.
BOARD OR BOARD OF DIRECTORS: The board of directors for each Fund. The term is
used in the singular because the board for each fund is comprised of the same
individuals.
DIRECTOR: A member of the Board of Directors of Selected American Shares, Inc.,
and Selected Special Shares, Inc.; and a trustee of Selected Capital
Preservation Trust (which is governed by a board of trustees).
ELIGIBLE VOTE: The holder of each full share of a Fund outstanding as of the
close of business on the record date is entitled to one vote for each share and
each fractional share is entitled to a proportionate share of one vote upon each
matter properly submitted to the meetings.
EXISTING ADVISORY AGREEMENTS: The existing advisory agreements between the
Adviser and Selected American Shares, Inc., Selected Special Shares, Inc., and
Selected Capital Preservation Trust.
EXISTING SUB-ADVISORY AGREEMENTS: The existing sub-advisory agreements between
the Adviser and Davis Selected Advisers - NY, Inc., on behalf of Selected
American Shares, Inc., Selected Special Shares, Inc., and Selected Capital
Preservation Trust. Also the existing sub-advisory agreement between the Adviser
and Bramwell Capital Management, Inc.
FUND: Any of the four Selected Funds: Selected American Shares, Selected Special
Shares, Selected U.S. Government Income Fund, or Selected Daily Government Fund.
INDEPENDENT ACCOUNTANTS: KPMG LLP serves as independent accountants of the
Selected Funds.
INDEPENDENT DIRECTORS: Those directors of a Selected Fund who, under the 1940
Act, are not considered "interested persons" of the Fund.
INVESTMENT POLICIES: The investment objectives, policies and restrictions
described in a Fund's prospectus and Statement of Additional Information.
MEETING: A Fund's Special Meeting of Shareholders of the Funds and any
adjournment(s) thereof.
NEW ADVISORY AGREEMENTS: The proposed advisory agreements between the Adviser
and Selected American Shares, Selected Special Shares, and Selected Capital
Preservation Trust. The New Advisory Agreements are all substantially identical
except for the fees paid to the Adviser. All terms of the New Advisory
Agreements are in substance identical to those of the Existing Advisory
Agreements, no new fees are being proposed and no fees are being increased.
NEW SUB-ADVISORY AGREEMENTS: The proposed sub-advisory agreements between the
Adviser and Davis Selected Advisers - NY, Inc., on behalf of each of the
Selected Funds. Also the proposed sub-advisory agreement between the Adviser and
Bramwell Capital Management, Inc., on behalf of Selected Special Shares. All
terms of the New Sub-Advisory Agreements are in substance identical to those of
the Existing Sub-Advisory Agreements, no new fees are being proposed and no fees
are being increased.
NOMINEE: An individual nominated for election or re-election to the Board of
Directors.
<PAGE>
APPENDIX A:
--------------------------------------------------------------------------------
DEFINITIONS OF SOME TERMS USED IN THIS PROXY (CONT.)
PROPOSAL: One of the four proposals described in the proxy statement.
PROXY STATEMENT: The proxy statement itself, not including supplemental
material.
RECORD DATE: The date for determining which Fund shareholders are entitled to
notice of and to vote at a meeting and any adjournment(s) thereof.
SEC: The Securities and Exchange Commission.
SELECTED FUNDS: The four Selected Funds offered to the public: Selected American
Shares, Selected Special Shares, Selected U.S. Government Bond Fund and Selected
Daily Government Fund.
STATEMENT OF ADDITIONAL INFORMATION: A legal document, which supplements the
prospectus and provides more detailed information about each of the Selected
Funds. You may obtain a copy without charge by calling Selected Funds at
1-800-243-1575.
<PAGE>
APPENDIX B:
--------------------------------------------------------------------------------
ELIGIBLE VOTES
as of September 8, 2000
FUND TOTAL
-------------------------------------------------------------
SELECTED AMERICAN SHARES, INC. 132,359,724.292
SELECTED SPECIAL SHARES, INC. 6,205,017.519
Selected U.S. Government Income Fund 404,951.998
Selected Daily Government Fund 133,777,134.826
SELECTED CAPITAL PRESERVATION TRUST 134,182,086.824
<PAGE>
APPENDIX C:
--------------------------------------------------------------------------------
NOMINEES AND SHAREHOLDERS
NOMINEES OWNING MORE THAN 1% OF SHARES OF ANY FUND
The following list sets forth each nominee who, as of September 8, 2000, owns
more than 1% of the total outstanding shares of any the Selected Funds.
<TABLE>
<CAPTION>
NOMINEE NAME FUND(S) IN WHICH % OF SHARES NO. OF SHARES
OWNERSHIP IS >1% OUTSTANDING OWNED
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LARRY J.B. ROBINSON Selected U.S. Government 6.13% 24,827.245
Income Fund
</TABLE>
The following table sets forth the name and holdings of any persons known by the
Selected Funds to be a record owner of more than 5% of the outstanding shares as
of September 8, 2000. Other than as indicated below, Selected Funds are not
aware of any shareholder that beneficially owns in excess of 25% of the Funds'
total outstanding shares.
SHAREHOLDERS OWNING MORE THAN 5% OF SHARES OF ANY FUND
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHAREHOLDER % OF SHARES NUMBER OF SHARES
OUTSTANDING OWNED
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED AMERICAN SHARES, INC.
Charles Schwab & Co., Inc. 26.37% 34,850,313.343
101 Montgomery Street
San Francisco, CA 94104-4122
Shelby Cullom Davis & Co. 17.74% 23,449,395.899
Investment # 3
609 5th Avenue, 11th Floor
New York, NY 10017-1021
FBSICO 17.41% 23,009,225.814
National Financial Service
200 Liberty Street, 5th Floor
New York, NY 10281-5500
SELECTED SPECIAL SHARES, INC.
Charles Schwab & Co., Inc. 9.55% 592,746.660
101 Montgomery Street
San Francisco, CA 94104-4122
Shelby Cullom Davis & CO. 8.28% 513,631.772
Investment # 3
609 5th Avenue, 11th Floor
New York, NY 10017-1021
<PAGE>
APPENDIX C:
--------------------------------------------------------------------------------
NOMINEES AND SHAREHOLDERS (CONT.)
NAME AND ADDRESS OF SHAREHOLDER % OF SHARES NUMBER OF SHARES
OUTSTANDING OWNED
---------------------------------------------------------------------------------------------------------------
SELECTED U.S. GOVERNMENT INCOME FUND
First Union Securities, Inc. 6.51% 26,353.030
A/C 5493-4653
Michi Kawai Christian
111 East Kilborne Avenue
Milwaukee, WI 53202-6611
Larry J.B. Robinson 6.13% 24,827.245
Attention: Mrs. Laura Allie
905 Terminal Tower
Cleveland, OH 44113-2207
First Union Securities, Inc. 5.81% 23,537.824
A/C 5893-7451
Susan Marie Noyes
111 East Kilbourn Avenue
Milwaukee, WI 53202-6611
SELECTED DAILY GOVERNMENT FUND
Shelby Cullom Davis & Co. 84.67% 113,275,608.200
Investment # 3
609 5th Avenue, 11th Floor
New York, NY 10017-1021
</TABLE>
<PAGE>
APPENDIX D:
--------------------------------------------------------------------------------
SELECTED FUNDS AUDIT COMMITTEE CHARTER
as amended 10/29/99
1. The Audit Committee shall be composed entirely of independent directors.
2. The purposes of the Audit Committee are:
(a) to oversee the Funds' accounting and financial reporting policies and
practices, its internal controls and, as appropriate, the internal
controls of certain service providers;
(b) to oversee the quality and objectivity of the Funds' financial
statements and the independent audit thereof; and
(c) to act as a liaison between the Funds' independent auditors and the
full Board of Directors.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control and the auditor's responsibility to plan and carry out a proper
audit.
3. To carry out its purposes, the Audit Committee shall have the following
duties and powers:
(a) to recommend the selection, retention or termination of auditors and,
in connection therewith, to evaluate the independence of the auditors,
including whether the auditors provide any consulting services to the
manager, and to receive the auditors' specific representations as to
their independence;
(b) to meet with the Funds' independent auditors, including private
meetings, as necessary (i) to review the arrangements for and scope of
the annual audit and any special audits; (ii) to discuss any matters of
concern relating to the Funds' financial statements, including any
adjustments to such statements recommended by the auditors, or other
results of said audit(s); (iii) to consider the auditors' comments with
respect to the Funds' financial policies, procedures and internal
accounting controls and management's responses thereto: and (iv) to
review the form of opinion the auditors propose to render to the Board
and shareholders;
(c) to consider the effect upon the Funds on any changes in accounting
principles or practices proposed by management or the auditors;
(d) to review the fees charged by the auditors for audit and non-audit
services;
(e) to investigate improprieties or suspected improprieties in fund
operations;
(f) to consider such other matters as the full Board shall request the
Committee to review, including but not limited to, advisory,
sub-advisory, and underwriting agreements, Rule 12b-1 distribution
plans, custodian and shareholder servicing issues, regulatory matters
and taxation issues; and
(g) to report its activities to the full Board on a regular basis and to
make such recommendations with respect to the above and other matters
as the Committee may deem necessary or appropriate.
4. The Committee shall meet on a regular basis and is empowered to hold
special meetings as circumstances require.
5. The Committee shall regularly meet with the Treasurer of the Funds and with
internal auditors, if any, for the management company.
<PAGE>
APPENDIX D:
--------------------------------------------------------------------------------
SELECTED FUNDS AUDIT COMMITTEE CHARTER (CONT.)
6. The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain special
counsel and other experts or consultants at the expense of the appropriate
Fund(s).
7. The Committee shall review this Charter at least annually and recommend any
changes to the full Board of Directors.
<PAGE>
APPENDIX E:
--------------------------------------------------------------------------------
OFFICERS OF THE SELECTED FUNDS, DAVIS SELECTED ADVISERS, L.P., DAVIS SELECTED
ADVISERS - NY, INC., AND BRAMWELL CAPITAL MANAGEMENT, INC.
OFFICERS OF THE SELECTED FUNDS
<TABLE>
<CAPTION>
NAME BIRTHDATE POSITION
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
CHRISTOPHER C. DAVIS(1)* July 13, 1965 President, Selected American Shares,
Inc., Selected Special Shares, Inc.
ANDREW DAVIS(2)* June 25, 1963 Vice President, all Selected Funds
CRESTON KING, III(3) April 19, 1963 President, Selected U.S. Government
Income Fund, Selected Daily Government
Fund
KENNETH C. EICH(3)* August 14, 1953 Vice President, all Selected Funds
SHARRA L. REED(3)* September 25, 1966 Vice President, Treasurer and
Assistant Secretary, all Selected Funds
THOMAS D. TAYS(3)* March 7, 1957 Vice President and Secretary, all
Selected Funds
</TABLE>
* These persons are also officers of the Adviser.
(1) Davis Selected Advisers - NY, Inc., 609 Fifth Avenue, New York, New York
10017.
(2) Davis Selected Advisers - NY, Inc., 124 East Marcy Street, Santa Fe, New
Mexico 87501.
(3) Davis Selected Advisers, L.P., 2949 East Elvira Road, Suite 101, Tucson,
Arizona 85706.
<PAGE>
APPENDIX E:
--------------------------------------------------------------------------------
OFFICERS OF THE SELECTED FUNDS, DAVIS SELECTED ADVISERS, L.P., DAVIS SELECTED
ADVISERS - NY, INC., AND BRAMWELL CAPITAL MANAGEMENT, INC. (CONT.)
OFFICERS OF DAVIS SELECTED ADVISERS, L.P.
AS GENERAL PARTNER, DAVIS INVESTMENTS, LLC, WILL MANAGE THE BUSINESS
AFFAIRS OF THE ADVISER. THE DIRECTORS AND OFFICERS
OF DAVIS INVESTMENTS, LLC, ARE:
<TABLE>
<CAPTION>
NAME BIRTHDATE POSITION
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
CHRISTOPHER C. DAVIS(1) July 13, 1965 Chairman (Sole Member), Chief Executive
Officer
SHELBY M.C. DAVIS(1) March 20, 1937 Founder and Senior Research Adviser
ANDREW DAVIS(2) June 25, 1963 President
KENNETH C. EICH(3) August 14, 1953 Chief Operating Officer
RUSSELL O. WIESE(1) May 18, 1966 Chief Marketing Officer
GARY P. TYC(3) May 27, 1956 Vice President, Chief Financial
Officer, Treasurer and Assistant
Secretary
SHARRA L. REED(3) September 25, 1966 Vice President
SANDRA E. DURAN(2) June 2, 1970 Vice President
THOMAS D. TAYS(3) March 7, 1957 Vice President, General Counsel and
Secretary
</TABLE>
Shelby M.C. Davis is the father of Andrew A. Davis and Christopher C. Davis.
(1) Davis Selected Advisers - NY, Inc., 609 Fifth Avenue, New York, New York
10017.
(2) Davis Selected Advisers - NY, Inc., 124 East Marcy Street, Santa Fe, New
Mexico 87501.
(3) Davis Selected Advisers, L.P., 2949 East Elvira Road, Suite 101, Tucson,
Arizona 85706.
<PAGE>
APPENDIX E:
--------------------------------------------------------------------------------
OFFICERS OF THE SELECTED FUNDS, DAVIS SELECTED ADVISERS, L.P., DAVIS SELECTED
ADVISERS - NY, INC., AND BRAMWELL CAPITAL MANAGEMENT, INC. (CONT.)
OFFICERS OF DAVIS SELECTED ADVISERS - NY, INC.
THE SUB-ADVISER IS A WHOLLY OWNED SUBSIDIARY OF THE ADVISER ORGANIZED AS
A DELAWARE CORPORATION. ITS OFFICERS AND DIRECTORS ARE:
NAME POSITION
-------------------------------------------------------------------------------
CHRISTOPHER C. DAVIS(1) Chairman (Director), Chief Executive Officer &
President
ANDREW A. DAVIS(2) Director, Vice President
RUSSELL O. WIESE(1) Director, Vice President
KENNETH C. EICH(3) Vice President, Chief Operating Officer
GARY P. TYC(3) Vice President, Treasurer and Assistant Secretary
THOMAS D. TAYS(3) Vice President, General Counsel and Secretary
The principal occupation of each of the directors and officers is working for
the Adviser and/or Sub-Adviser.
(1) Davis Selected Advisers - NY, Inc., 609 Fifth Avenue, New York, New York
10017.
(2) Davis Selected Advisers - NY, Inc., 124 East Marcy Street, Santa Fe, New
Mexico 87501.
(3) Davis Selected Advisers, L.P., 2949 East Elvira Road, Suite 101, Tucson,
Arizona 85706.
OFFICERS OF BRAMWELL CAPITAL MANAGEMENT, INC.
745 FIFTH AVENUE, NEW YORK, NEW YORK 10151
THE DIRECTORS AND OFFICERS OF BRAMWELL CAPITAL MANAGEMENT ARE:
NAME BIRTHDATE POSITION
--------------------------------------------------------------------------------
ELIZABETH R. BRAMWELL December 1, 1940 Chairman, President, CEO,
CIO & Treasurer
MARY FOSTER MCCOLLUM June 16, 1946 Executive Vice President
JOANN FORTINO May 22, 1949 Senior Vice President
ROBERT FLETCHER STARBUCK April 19, 1950 Senior Vice President
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS -
SELECTED AMERICAN SHARES, INC.,
SELECTED SPECIAL SHARES, INC., AND
SELECTED CAPITAL PRESERVATION TRUST
SELECTED AMERICAN SHARES, INC.
MANAGEMENT AGREEMENT
JANUARY 1, 2001
AGREEMENT, made as of January 1, 2001, by and between SELECTED AMERICAN SHARES,
INC., a Maryland corporation (hereinafter called the "Fund"), and DAVIS SELECTED
ADVISERS, L.P., a Colorado limited partnership (hereinafter called the
"Manager").
W I T N E S S E T H:
In consideration of the mutual covenants hereinafter contained, IT IS HEREBY
AGREED by and between the parties hereto as follows:
1. Management. The Fund hereby employs the Manager to act as its investment
adviser and to manage the investment and reinvestment of the assets of the
Fund, and otherwise to administer the Fund's affairs to the extent
requested by the Board of Directors of the Fund, all subject to the
supervision of the Board of Directors of the Fund and the applicable
provisions of the Articles of Incorporation and the Bylaws of the Fund, for
the period and on the terms herein set forth. The Manager hereby accepts
such employment and agrees during such period to render the services and to
assume the obligations herein set forth for the compensation herein
provided. The Manager shall in acting hereunder be an independent
contractor and unless otherwise expressly provided or authorized hereunder
or by the Board of Directors of the Fund, shall have no authority to act
for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
2. Office Space, Facilities, Directors, Officers. The Manager shall, at its
own expense, furnish to the Fund suitable office space in its own offices
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for carrying out its
duties hereunder and shall arrange, if desired by the fund, for members of
the Manager's organization to serve without salaries from the Fund as
directors, officers or agents of the Fund if duly elected or appointed to
such positions by the shareholders or by the Board of Directors of the
Fund, subject to their individual consent and to any limitations imposed by
law.
3. Expenses. The Manager shall be responsible only for those expenses
expressly stated in paragraph 2 to be the responsibility of the Manager and
shall not be responsible for any other expenses of the Fund including, as
illustrative and without limitation, fees and charges of any custodian
(including charges as custodian and for keeping books and records and
similar services to the Fund); fees and expenses of directors, other than
directors described in paragraph 2; fees and expenses of independent
auditors, legal counsel, transfer agents, dividend disbursing agents, and
registrars; costs of and incident to issuance, redemption and transfer of
its shares, and distributions to shareholders (including dividend payments
and reinvestment of dividends); costs of acquiring portfolio securities,
including brokers' commissions; interest charges; taxes and corporate fees
payable to any government or governmental body or agency (including those
incurred on account of the registration or qualification of securities
issued by the Fund); dues and other expenses incident to the Fund's
membership in the Investment
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
Company Institute and other like associations; cost of stock certificates,
stockholder meetings, corporate reports, reports and notices to
stockholders; costs of printing, stationery, and bookkeeping forms; and
amounts to be paid by the Fund in accordance with any Rule 12b-1
Distribution Plan. The Manager shall be reimbursed by the Fund on or before
the fifteenth day of each calendar month for all expenses paid or incurred
during the preceding calendar month by the Manager for or on behalf of or
at the request or direction of the Fund that are not the responsibility of
the Manager hereunder.
4. Non-Exclusive Services, Manager's Liability. Services of the Manager herein
provided are not to be deemed exclusive, and the Manager shall be free to
render similar services or other services to others so long as its services
hereunder shall not be impaired thereby. In the absence of willful
misfeasance, bad faith or gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Manager, the Manager
shall not be subject to liability to the Fund or any stockholder of the
Fund for any act or omission in the course of, or in connection with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
5. Fees. The Fund shall pay to the Manager a monthly management fee calculated
on the basis of the average daily net assets of the Fund as follows:
NET ASSETS VALUE OF AVERAGE DAILY NET ASSETS
MONTHLY RATE OF THE FUND DURING THE MONTH
--------------------------------------------------------------------------------
0.65% of....................................First $500 million
0.60% of....................................Second $500 million
0.55% of....................................Next $2 billion
0.54% of....................................Next $1 billion
0.53% of....................................Next $1 billion
0.52% of....................................Next $1 billion
0.51% of....................................Next $1 billion
0.50% have..................................Over $7 billion
provided, however, that such fee for any period, which shall not be a full
monthly period, shall be prorated according to the proportion, which such
period bears to the full month. The fee shall be paid on or before the
fifteenth day of the month following the month for which the fee is
payable.
6. Conflicts. It is understood that the officers, directors, agents and
stockholders of the Fund are or may be interested in the Manager as
officers, partners, employees or agents and that the officers, partners,
employees and agents of the Manager may be interested in the Fund otherwise
than as stockholders.
7. Use of Name. The Manager acknowledges that the use of the term "Selected"
in its name is with the acquiescence of the Fund and is subject to
revocation at any time by the Board of Directors or by a majority of the
directors who are not interested persons of the Fund.
8. Term, Termination. This Agreement shall become effective on the date hereof
and shall continue through January 1, 2003. The Agreement shall continue
thereafter so long as such continuance is approved annually in the manner
required by the Investment Company Act of 1940 (the "Act"). This Agreement
shall immediately terminate in the event of its assignment. Either party
hereto may, at any time on sixty (60) days' prior written notice to the
other, terminate this Agreement without payment of any penalty. Termination
on the part of the Fund may be effected either by the Board of Directors of
the Fund or by a vote of a majority of the outstanding voting securities of
the Fund.
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
9. Additional Series. In the event that the Fund creates a new series, this
Agreement shall apply to such new series if the Fund and the Manager shall
so agree in writing and the Agreement is approved in the manner required by
the Act as to each such new series.
10. Change in Partnership. The Manager agrees to notify the Fund of any
material change in the membership of the Manager's partnership within 30
days after such change.
11. Definitions. The terms "assignment," "a vote of a majority of the
outstanding voting securities" and "interested persons" when used herein
shall have the respective meanings in the Act as now in effect and as from
time to time amended.
12. Controlling Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of New Mexico.
IN WITNESS WHEREOF, the parties hereto have caused this Management Agreement to
be executed and made effective as of January 1, 2001.
SELECTED AMERICAN SHARES, INC.
By:
-------------------------------
Title:
DAVIS SELECTED ADVISERS, L.P.
By: Davis Investments, LLC
Its General Partner
By:
-------------------------------
Title:
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
SELECTED SPECIAL SHARES, INC.
MANAGEMENT AGREEMENT
JANUARY 1, 2001
AGREEMENT, made as of January 1, 2001, by and between SELECTED SPECIAL SHARES,
INC., a Maryland corporation (hereinafter called the "Fund"), and DAVIS SELECTED
ADVISERS, L.P., a Colorado limited partnership (hereinafter called the
"Manager").
W I T N E S S E T H:
In consideration of the mutual covenants hereinafter contained, IT IS HEREBY
AGREED by and between the parties hereto as follows:
1. Management. The Fund hereby employs the Manager to act as its investment
adviser and to manage the investment and reinvestment of the assets of the
Fund, and otherwise to administer the Fund's affairs to the extent
requested by the Board of Directors of the Fund, all subject to the
supervision of the Board of Directors of the Fund and the applicable
provisions of the Articles of Incorporation and the Bylaws of the Fund, for
the period and on the terms herein set forth. The Manager hereby accepts
such employment and agrees during such period to render the services and to
assume the obligations herein set forth for the compensation herein
provided. The Manager shall in acting hereunder be an independent
contractor and unless otherwise expressly provided or authorized hereunder
or by the Board of Directors of the Fund, shall have no authority to act
for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
2. Office Space, Facilities, Directors, Officers. The Manager shall, at its
own expense, furnish to the Fund suitable office space in its own offices
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for carrying out its
duties hereunder and shall arrange, if desired by the fund, for members of
the Manager's organization to serve without salaries from the Fund as
directors, officers or agents of the Fund if duly elected or appointed to
such positions by the shareholders or by the Board of Directors of the
Fund, subject to their individual consent and to any limitations imposed by
law.
3. Expenses. The Manager shall be responsible only for those expenses
expressly stated in paragraph 2 to be the responsibility of the Manager and
shall not be responsible for any other expenses of the Fund including, as
illustrative and without limitation, fees and charges of any custodian
(including charges as custodian and for keeping books and records and
similar services to the Fund); fees and expenses of directors, other than
directors described in paragraph 2; fees and expenses of independent
auditors, legal counsel, transfer agents, dividend disbursing agents, and
registrars; costs of and incident to issuance, redemption and transfer of
its shares, and distributions to shareholders (including dividend payments
and reinvestment of dividends); costs of acquiring portfolio securities,
including brokers' commissions; interest charges; taxes and corporate fees
payable to any government or governmental body or agency (including those
incurred on account of the registration or qualification of securities
issued by the Fund); dues and other expenses incident to the Fund's
membership in the Investment Company Institute and other like associations;
cost of stock certificates, stockholder meetings, corporate reports,
reports and notices to stockholders; costs of printing, stationery, and
bookkeeping forms; and amounts to be paid by the Fund in accordance with
any Rule 12b-1 Distribution Plan. The Manager shall be reimbursed by the
Fund on or before the fifteenth day of each calendar month for all expenses
paid or incurred during the preceding calendar month by the Manager for or
on behalf of or at the request or direction of the Fund that are not the
responsibility of the Manager hereunder.
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
4. Non-Exclusive Services, Manager's Liability. Services of the Manager herein
provided are not to be deemed exclusive, and the Manager shall be free to
render similar services or other services to others so long as its services
hereunder shall not be impaired thereby. In the absence of willful
misfeasance, bad faith or gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Manager, the Manager
shall not be subject to liability to the Fund or any stockholder of the
Fund for any act or omission in the course of, or in connection with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
5. Fees. Commencing with the first day of the month coincident with or next
following the approval of this Agreement by a vote of a majority of the
outstanding voting securities of the Fund, the Fund shall pay to the
Manager a management fee calculated on the basis of the average daily net
assets of the Fund at the annual rate of 0.70% of the first $50,000,000 of
average daily net assets, 0.675% of the next $100,000,000 of average daily
net assets, 0.65% on the next $100,000,000 of average daily net assets and
0.60% of average daily net assets in excess of $250,000,000. The fee shall
be payable monthly and each fee payment shall be made on or before the
fifteenth day of the month next succeeding the month for which the fee is
paid.
6. Conflicts. It is understood that the officers, directors, agents and
stockholders of the Fund are or may be interested in the Manager as
officers, partners, employees or agents and that the officers, partners,
employees and agents of the Manager may be interested in the Fund otherwise
than as stockholders.
7. Use of Name. The Manager acknowledges that the use of the term "Selected"
in its name is with the acquiescence of the Fund and is subject to
revocation at any time by the Board of Directors or by a majority of the
directors who are not interested persons of the Fund.
8. Term, Termination. This Agreement shall become effective on the date hereof
and shall continue through January 1, 2003. The Agreement shall continue
thereafter so long as such continuance is approved annually in the manner
required by the Investment Company Act of 1940 (the "Act"). This Agreement
shall immediately terminate in the event of its assignment. Either party
hereto may, at any time on sixty (60) days' prior written notice to the
other, terminate this Agreement without payment of any penalty. Termination
on the part of the Fund may be effected either by the Board of Directors of
the Fund or by a vote of a majority of the outstanding voting securities of
the Fund.
9. Additional Series. In the event that the Fund creates a new series, this
Agreement shall apply to such new series if the Fund and the Manager shall
so agree in writing and the Agreement is approved in the manner required by
the Act as to each such new series.
10. Change in Partnership. The Manager agrees to notify the Fund of any
material change in the membership of the Manager's partnership within 30
days after such change.
11. Definitions. The terms "assignment," "a vote of a majority of the
outstanding voting securities" and "interested persons" when used herein
shall have the respective meanings in the Act as now in effect and as from
time to time amended.
12. Controlling Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of New Mexico.
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
IN WITNESS WHEREOF, the parties hereto have caused this Management Agreement to
be executed and made effective as of January 1, 2001.
SELECTED SPECIAL SHARES, INC.
By:
------------------------------
Title
DAVIS SELECTED ADVISERS, L.P.
By: Davis Investments, LLC
Its General Partner
By:
------------------------------
Title
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
SELECTED CAPITAL PRESERVATION TRUST
MANAGEMENT AGREEMENT
JANUARY 1, 2001
AGREEMENT, made as of January 1, 2001, by and between SELECTED CAPITAL
PRESERVATION TRUST, an Ohio business trust (hereinafter called the "Trust"), in
respect to the Trust's authorized series: SELECTED U.S. GOVERNMENT INCOME FUND
and SELECTED DAILY GOVERNMENT FUND (individually, a "Fund" and collectively, the
"Funds") and DAVIS SELECTED ADVISERS, L.P., a Colorado limited partnership
(hereinafter called the "Manager").
W I T N E S S E T H:
In consideration of the mutual covenants hereinafter contained, IT IS HEREBY
AGREED by and between the parties hereto as follows:
1. Management. The Trust hereby employs the Manager to act as its investment
adviser and to manage the investment and reinvestment of the assets of the
Funds, and otherwise to administer the Funds' affairs to the extent
requested by the Board of Trustees of the Funds, all subject to the
supervision of the Board of Trustees of the Trust and the applicable
provisions of the Declaration of Trust of the Trust, for the period and on
the terms herein set forth. The Manager hereby accepts such employment and
agrees during such period to render the services and to assume the
obligations herein set forth for the compensation herein provided. The
Manager shall in acting hereunder be an independent contractor and unless
otherwise expressly provided or authorized hereunder or by the Board of
Trustees of the Trust, shall have no authority to act for or represent the
Trust in any way or otherwise be deemed an agent of the Trust.
2. Office Space, Facilities, Directors, Officers. The Manager shall, at its
own expense, furnish to the Trust suitable office space in its own offices
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for carrying out its
duties hereunder and shall arrange, if desired by the Trust, for members of
the Manager's organization to serve without salaries from the Trust as
trustees, officers or agents of the Trust if duly elected or appointed to
such positions by the shareholders or by the Board of Trustees of the
Trust, subject to their individual consent and to any limitations imposed
by law.
3. Expenses. The Manager shall be responsible only for those expenses
expressly stated in paragraph 2 to be the responsibility of the Manager and
shall not be responsible for any other expenses of the Trust including, as
illustrative and without limitation, fees and charges of any custodian
(including charges as custodian and for keeping books and records and
similar services to the Trust); fees and expenses of trustees, other than
trustees described in paragraph 2; fees and expenses of independent
auditors, legal counsel, transfer agents, dividend disbursing agents, and
registrars; costs of and incident to issuance, redemption and transfer of
its shares, and distributions to shareholders (including dividend payments
and reinvestment of dividends); costs of acquiring portfolio securities,
including brokers' commissions; interest charges; taxes and corporate fees
payable to any government or governmental body or agency (including those
incurred on account of the registration or qualification of securities
issued by the Trust); dues and other expenses incident to the Trust's
membership in the Investment Company Institute and other like associations;
cost of stock certificates, shareholder meetings, corporate reports,
reports and notices to shareholders; costs of printing, stationery, and
bookkeeping forms; and amounts to be paid by the Trust in accordance with
any Rule 12b-1 Distribution Plan. The Manager shall be reimbursed by the
Trust on or before the fifteenth day of each calendar month for all
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
expenses paid or incurred during the preceding calendar month by the
Manager for or on behalf of or at the request or direction of the Trust
which are not the responsibility of the Manager hereunder.
4. Non-Exclusive Services, Manager's Liability. Services of the Manager herein
provided are not to be deemed exclusive, and the Manager shall be free to
render similar services or other services to others so long as its services
hereunder shall not be impaired thereby. In the absence of willful
misfeasance, bad faith or gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Manager, the Manager
shall not be subject to liability to the Trust or any shareholder of the
Trust for any act or omission in the course of, or in connection with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
5. Fees. Commencing with the first day of the month coincident with or next
following the approval of this Agreement by a vote of a majority of the
outstanding voting securities of each Fund, each Fund shall pay to the
Manager a management fee calculated on the basis of the average daily net
assets of each Fund at the following annual rates:
FUND ANNUAL RATE
---- -----------
Selected U.S. Government Income Fund 0.30%
Selected Daily Government Fund 0.30%
The fee for each Fund shall be payable monthly and each fee payment shall
be made on or before the fifteenth day of the month next succeeding the
month for which the fee is paid.
6. Expense Limitation. If the total expenses (excluding extraordinary items)
of the Selected U.S. Government Income Fund for any fiscal year of the
Trust exceeds 1.5% of average daily net assets for such period, the Manager
shall reimburse any such excess to such Fund.
7. Conflicts. It is understood that the officers, trustees, agents and
shareholders of the Fund are or may be interested in the Manager as
officers, directors, agents or shareholders and that the officers,
directors, stockholders and agents of the Manager may be interested in the
Fund otherwise than as shareholders.
8. Use of Name. The Manager acknowledges that the use of the term "Selected"
in its name is with the acquiescence of the Trust and is subject to
revocation at any time by the Board of Trustees or by a majority of the
trustees who are not interested persons of the Trust.
9. Term, Termination. This Agreement shall become effective on the date hereof
and shall continue through January 1, 2003. The Agreement shall continue
thereafter so long as such continuance is approved annually in the manner
required by the Investment Company Act of 1940 (the "Act"). This Agreement
shall immediately terminate in the event of its assignment. Either party
hereto may, at any time on sixty (60) days' prior written notice to the
other, terminate this Agreement without payment of any penalty. Termination
with respect to any Fund may be effected on behalf of the Trust either by
the Board of Trustees of the Trust or by a vote of a majority of the
outstanding voting securities of such Fund.
10. Additional Series. In the event that the Trust creates a new series, this
Agreement shall apply to such new series if the Trust and the Manager shall
so agree in writing, such agreement specifies the fee to be charged to such
series and the Agreement is approved in the manner required by the Act as
to each such new series.
<PAGE>
APPENDIX F:
--------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
11. Change in Partnership. The Manager agrees to notify the Trust of any
material change in the membership of the Manager's partnership within 30
days after such change.
12. Definitions. The terms "assignment," "a vote of a majority of the
outstanding voting securities" and "interested persons" when used herein
shall have the respective meanings in the Act as now in effect and as from
time to time amended.
13. No Personal Liability. The shareholders, trustees, officers, employees and
agents of the Trust shall not personally be bound by or liable under this
Agreement, nor shall resort be had to their private property for
satisfaction of any obligation or claim hereunder, as is more fully
provided under the terms of the Amended Declaration of Trust.
14. Controlling Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of New Mexico except as to
Section 13 hereof which shall be construed under the laws of the State of
Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this Management Agreement to
be executed and made effective as of January 1, 2001.
SELECTED CAPITAL PRESERVATION TRUST
By:
----------------------------------
Title:
DAVIS SELECTED ADVISERS, L.P.
By: Davis Investments, LLC
Its General Partner
By:
---------------------------------
Title:
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS -
SELECTED AMERICAN SHARES, INC.,
SELECTED SPECIAL SHARES, INC.,
SELECTED CAPITAL PRESERVATION TRUST AND
BRAMWELL CAPITAL MANAGEMENT
SELECTED AMERICAN SHARES, INC.
SUB-ADVISORY AGREEMENT
JANUARY 1, 2001
This is to confirm that Davis Selected Advisers, L.P. (the "Adviser"), is
retaining Davis Selected Advisers - NY, Inc. ("DSA-NY"), as investment
sub-adviser for the portfolio of Selected American Shares, Inc. (the "Fund").
The terms and conditions of your retention are as follows:
1. Service as Sub-Adviser. DSA-NY shall act as an investment sub-adviser for
the Fund and will provide such investment management and research services
as the Adviser shall request subject to the general supervision of the
Board of Directors of the Fund, the Adviser, and to any applicable
provisions as in effect from time to time of (a) the Articles of
Incorporation and Bylaws of the Fund, (b) the prospectus, Statement of
Additional information and other information set forth in the Fund's
registration documents under the Securities Act of 1933 and the Investment
Company Act of 1940 ("1940 Act"), including any supplements thereto, (c)
the Investment Advisory Agreement between the Adviser and the Fund (the
"Investment Advisory Agreement"), the Adviser's and the Fund's Code of
Ethics and (d) any additional policies or guidelines established by the
Fund's Board of Directors or the Adviser. DSA-NY acknowledges receipt of
copies of the above documents as in effect on the date of acceptance of
this letter. The Adviser agrees that it will promptly deliver to DSA-NY any
amendments, changes or additions of or to these documents.
2. Conformance to Guidelines. DSA-NY agrees that all securities transactions
will conform to (a) the stated objectives and policies of the Fund, (b) the
brokerage policies set forth in the Investment Advisory Agreement (which
are hereby incorporated by reference herein) and the registration
documents, and (c) those investment and brokerage policies or guidelines
directed by the Board of Directors of the Fund, any committee thereof and
the Adviser.
3. Independent Contractor. DSA-NY shall be an independent contractor. Unless
otherwise expressly provided or authorized hereunder, or by the Board of
Directors of the Fund, DSA-NY shall have no authority to represent the Fund
or the Adviser in any way or otherwise be an agent of the Adviser or the
Fund, except with regard to the execution of securities transactions on
behalf of the Fund with registered broker/dealers, including broker/dealers
affiliated with the Adviser, provided transactions with affiliated
broker/dealers comply with Rule 17e-1 of the 1940 Act.
4. Reports and Documentation. DSA-NY shall provide the Adviser with any
reports, analyses or other documentation the Adviser requests including
those related to placement of security transactions, its administrative
responsibilities and its responsibility to monitor compliance with stated
investment objectives, policies and limitations and the investment
performance of the Fund. DSA-NY agrees, directly or through an agent, to
provide daily information in respect to any portfolio transactions of the
Fund to the Adviser. DSA-NY agrees to provide all documentation reasonably
required by the Adviser to maintain the Fund's accounting
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
records in accordance with the 1940 Act and the Investment Advisers Act of
1940 and the regulations issued thereunder, and to preserve copies of all
documents and records related to asset transactions, positions and
valuations related to the Fund in the manner and for the periods prescribed
by such regulations. DSA-NY further agrees that all documents and records
it maintains relating to the Fund are the property of the Fund and will be
surrendered to the Adviser or the Fund upon the request of either. DSA-NY
agrees to provide information and to allow inspection of such documents and
records at reasonable times by any authorized representative of the
Adviser, the Fund's Board of Directors or any committee thereof, the Fund's
independent public accountants or appropriate regulatory authorities.
DSA-NY shall provide to the Adviser a copy of its Form ADV as filed with
the SEC and as amended from time to time and a written list of persons
DSA-NY has authorized to give written and/or oral instructions to the
Adviser and the Fund custodian.
5. Access to Personnel. DSA-NY agrees to make its personnel who are engaged in
activities on behalf of the Fund available at reasonable times for
consultations with the Adviser's personnel and the Fund's Board of
Directors or any committee thereof, including attendance at their meetings,
wherever situated. In addition, personnel of DSA-NY, at the request of the
Adviser, will attend other meetings to be scheduled at mutually convenient
times.
6. Facilities, Equipment and Personnel. DSA-NY agrees to provide all office
facilities, equipment and personnel needed for carrying out its duties
hereunder at its own expense. In addition, DSA-NY shall, if requested by
the Adviser or the Fund, employ at its own expense and subject to the prior
written approval of the Adviser which approval shall not be unreasonably
withheld (i) a public auditing firm, (ii) attorneys and (iii) such other
professional staff as in the sole discretion of the Adviser are necessary
to assure the fulfillment of the terms and conditions of this agreement.
7. Non-Exclusive. It is agreed that DSA-NY's services are not to be deemed
exclusive and DSA-NY shall be free to render similar services or other
services to others provided that (i) its services hereunder are not
impaired and are not in violation of federal or state securities laws and
(ii) that it shall not provide services to any registered investment
company other than the Fund or other investment companies managed by the
Adviser without the Adviser's prior express written permission.
8. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties hereunder,
DSA-NY, its officers, directors and employees shall not be subject to
liability for any act or omission in the cause of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security. In the event of any claim,
arbitration, suit, or administrative proceeding in which DSA-NY or the
Adviser is a party and in which it is finally determined that there is
liability or wrongdoing by only one of us, the party liable or found to be
the wrongdoer shall pay for all liability and expenses of such claim or
proceeding including reasonable attorneys' fees. If it is determined that
there is liability or wrongdoing by both or none of us, then each shall pay
their own liability and expenses. In the event of any settlement of any
such claim, arbitration, suit or proceeding before final determination by a
court or arbitrator(s), the liability and expenses shall be assumed as
agreed between the parties, but if there is no agreement within thirty (30)
days of such settlement, then the assumption of liability and expenses
shall be settled by arbitration, in accordance with the then applicable
rules of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator shall be final and binding and may be entered in
any court having jurisdiction. The parties shall pay for their own costs
and expenses in respect to any such arbitration and such costs may be
included in the arbitrator's award.
9. Compliance with Applicable Law. As investment sub-adviser, DSA-NY
understands that it will be responsible for complying with all provisions
of applicable law, including the 1940 Act, the Investment Advisers Act of
1940, and the Insider Trading and Securities Fraud Enforcement Act of 1988
and all rules and regulations thereunder. DSA-NY agrees to adopt and comply
with the "Code of Ethics of and for Davis Selected Advisers,
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
L.P. and the Companies For Which It Acts As Investment Adviser" as in
effect from time to time and to keep in effect a policy and supervisory
procedures designed to prevent insider trading.
10. Common Control, Fees. The parties acknowledge that DSA-NY is controlled by
or under common control with the Adviser. The Adviser shall pay DSA-NY all
reasonable direct and indirect costs associated with the maintenance of an
office and the performance of the terms of this Agreement. The Adviser
shall also reimburse expenses expressly approved for reimbursement by the
Adviser. Payment for DSA-NY's services and reimbursement of expenses
approved by the Adviser shall be made monthly, in arrears, by the 15th day
of the following month.
11. Term. This Agreement shall become effective on the later of January 1, 2001
or the first business day after the date this Agreement is approved in
accordance with the 1940 Act (provided that it is reflected in an effective
post-effective amendment under the Securities Act of 1933 and the 1940
Act). Unless sooner terminated as hereunder provided, it shall initially
remain in effect for a period not exceeding two years. Thereafter, subject
to the termination provisions herein, this Agreement shall continue in
force from year to year thereafter, but only as long as such continuance is
specifically approved at least annually in the manner required by the 1940
Act; provided, however, that if the continuation of this Agreement is not
approved, DSA-NY may continue to serve in the manner and to the extent
permitted by the 1940 Act and the rules and regulations thereunder.
12. Termination. This Agreement shall automatically terminate immediately in
the event of its assignment (except as otherwise permitted by the 1940 Act
or rules thereunder) or in the event of the termination of the Investment
Advisory Agreement. This Agreement may be terminated without payment of any
penalty at any time (a) upon sixty (60) days' written notice to DSA-NY by
the Adviser or upon such sixty (60) days' written notice to DSA-NY by the
Fund pursuant to action by its Board of Directors or by the vote of a
majority of the outstanding voting securities of the Fund, or (b) upon
sixty (60) days' written notice by DSA-NY to the Adviser. The terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth in the 1940 Act and the rules and
regulations thereunder. Termination of this Agreement shall not affect
DSA-NY's right to receive payments on any unpaid balance of the
compensation earned and reimbursable expenses incurred prior to such
termination. Upon receipt of notification of termination as provided above
DSA-NY shall immediately cease all activities in connection with the Fund
except as otherwise directed by the Adviser.
13. Use of Names. DSA-NY agrees that it shall abide by the terms of the
agreement of the Adviser with the Fund as to the names of the Fund and the
Adviser and shall not use the name of the Adviser or the Fund without the
prior written consent of the Adviser or the Fund.
14. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute or rule or otherwise, the remainder
shall not be thereby affected.
15. Choice of Law. This Agreement shall be construed according to the laws of
the State of New Mexico. It may be executed in counterparts each of which
shall be deemed an original and all of which together shall constitute one
and the same agreement.
If the foregoing terms and conditions are acceptable to you, please acknowledge
in the space provided. Upon your acceptance, the retention and the mutual
obligations in respect thereto shall be effective as provided herein.
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
Sincerely,
Davis Selected Advisers, L.P.
By: Davis Investments, LLC
General Partner
By:
--------------------------
Its:
-------------------------
Accepted and Approved this 1st day of January, 2001
Davis Selected Advisers - NY, Inc.
By:
--------------------------
Its:
-------------------------
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
SELECTED SPECIAL SHARES, INC.
SUB-ADVISORY AGREEMENT
JANUARY 1, 2001
This is to confirm that Davis Selected Advisers, L.P. (the "Adviser"), is
retaining Davis Selected Advisers - NY, Inc. ("DSA-NY"), as investment
sub-adviser for the portfolio of Selected Special Shares, Inc. (the
"Fund").
The terms and conditions of your retention are as follows:
1. Service as Sub-Adviser. DSA-NY shall act as an investment sub-adviser for
the Fund and will provide such investment management and research services
as the Adviser shall request subject to the general supervision of the
Board of Directors of the Fund, the Adviser and to any applicable
provisions as in effect from time to time of (a) the Articles of
Incorporation and Bylaws of the Fund, (b) the prospectus, Statement of
Additional Information and other information set forth in the Fund's
registration documents under the Securities Act of 1933 and the Investment
Company Act of 1940 ("1940 Act"), including any supplements thereto, (c)
the Investment Advisory Agreement between the Adviser and the Fund (the
"Investment Advisory Agreement"), the Adviser's and the Fund's Code of
Ethics and (d) any additional policies or guidelines established by the
Fund's Board of Directors or the Adviser. DSA-NY acknowledges receipt of
copies of the above documents as in effect on the date of acceptance of
this letter. The Adviser agrees that it will promptly deliver to DSA-NY any
amendments, changes or additions of or to these documents.
2. Conformance to Guidelines. DSA-NY agrees that all securities transactions
will conform to (a) the stated objectives and policies of the Fund, (b) the
brokerage policies set forth in the Investment Advisory Agreement (which
are hereby incorporated by reference herein) and the registration
documents, and (c) those investment and brokerage policies or guidelines
directed by the Board of Directors of the Fund, any committee thereof and
the Adviser.
3. Independent Contractor. DSA-NY shall be an independent contractor. Unless
otherwise expressly provided or authorized hereunder, or by the Board of
Directors of the Fund, DSA-NY shall have no authority to represent the Fund
or the Adviser in any way or otherwise be an agent of the Adviser or the
Fund, except with regard to the execution of securities transactions on
behalf of the Fund with registered broker/dealers, including broker/dealers
affiliated with the Adviser, provided transactions with affiliated
broker/dealers comply with Rule 17e-1 of the 1940 Act.
4. Reports and Documentation. DSA-NY shall provide the Adviser with any
reports, analyses or other documentation the Adviser requests including
those related to placement of security transactions, its administrative
responsibilities and its responsibility to monitor compliance with stated
investment objectives, policies and limitations and the investment
performance of the Fund. DSA-NY agrees, directly or through an agent, to
provide daily information in respect to any portfolio transactions of the
Fund to the Adviser. DSA-NY agrees to provide all documentation reasonably
required by the Adviser to maintain the Fund's accounting records in
accordance with the 1940 Act and the Investment Advisers Act of 1940 and
the regulations issued thereunder, and to preserve copies of all documents
and records related to asset transactions, positions and valuations related
to the Fund in the manner and for the periods prescribed by such
regulations. DSA-NY further agrees that all documents and records it
maintains relating to the Fund are the property of the Fund and will be
surrendered to the Adviser or the Fund upon the request of either. DSA-NY
agrees to provide information and to allow inspection of such documents and
records at reasonable times by any authorized representative of the
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
Adviser, the Fund's Board of Directors or any committee thereof, the Fund's
independent public accountants or appropriate regulatory authorities.
DSA-NY shall provide to the Adviser a copy of its Form ADV as filed with
the SEC and as amended from time to time and a written list of persons
DSA-NY has authorized to give written and/or oral instructions to the
Adviser and the Fund custodian.
5. Access to Personnel. DSA-NY agrees to make its personnel who are engaged in
activities on behalf of the Fund available at reasonable times for
consultations with the Adviser's personnel and the Fund's Board of
Directors or any committee thereof, including attendance at their meetings,
wherever situated. In addition, personnel of DSA-NY, at the request of the
Adviser, will attend other meetings to be scheduled at mutually convenient
times.
6. Facilities, Equipment and Personnel. DSA-NY agrees to provide all office
facilities, equipment and personnel needed for carrying out its duties
hereunder at its own expense. In addition, DSA-NY shall, if requested by
the Adviser or the Fund, employ at its own expense and subject to the prior
written approval of the Adviser which approval shall not be unreasonably
withheld (i) a public auditing firm, (ii) attorneys and (iii) such other
professional staff as in the sole discretion of the Adviser are necessary
to assure the fulfillment of the terms and conditions of this agreement.
7. Non-Exclusive. It is agreed that DSA-NY's services are not to be deemed
exclusive and DSA-NY shall be free to render similar services or other
services to others provided that (i) its services hereunder are not
impaired and are not in violation of federal or state securities laws and
(ii) that it shall not provide services to any registered investment
company other than the Fund or other investment companies managed by the
Adviser without the Adviser's prior express written permission.
8. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties hereunder,
DSA-NY, its officers, directors and employees shall not be subject to
liability for any act or omission in the cause of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security. In the event of any claim,
arbitration, suit or administrative proceeding in which DSA-NY or the
Adviser is a party and in which it is finally determined that there is
liability or wrongdoing by only one of us, the party liable or found to be
the wrongdoer shall pay for all liability and expenses of such claim or
proceeding including reasonable attorneys' fees. If it is determined that
there is liability or wrongdoing by both or none of us, then each shall pay
their own liability and expenses. In the event of any settlement of any
such claim, arbitration, suit or proceeding before final determination by a
court or arbitrator(s), the liability and expenses shall be assumed as
agreed between the parties, but if there is no agreement within thirty (30)
days of such settlement, then the assumption of liability and expenses
shall be settled by arbitration, in accordance with the then applicable
rules of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator shall be final and binding and may be entered in
any court having jurisdiction. The parties shall pay for their own costs
and expenses in respect to any such arbitration and such costs may be
included in the arbitrator's award.
9. Compliance with Applicable Law. As investment sub-adviser, DSA-NY
understands that it will be responsible for complying with all provisions
of applicable law, including the 1940 Act, the Investment Advisers Act of
1940, and the Insider Trading and Securities Fraud Enforcement Act of 1988
and all rules and regulations thereunder. DSA-NY agrees to adopt and comply
with the "Code of Ethics of and for Davis Selected Advisers, L.P. and the
Companies For Which It Acts As Investment Adviser" as in effect from time
to time and to keep in effect a policy and supervisory procedures designed
to prevent insider trading.
10. Common Control, Fees. The parties acknowledge that DSA-NY is controlled by
or under common control with the Adviser. The Adviser shall pay DSA-NY all
reasonable direct and indirect costs associated with the maintenance of an
office and the performance of the terms of this Agreement. The Adviser
shall also reimburse
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
expenses expressly approved for reimbursement by the Adviser. Payment for
DSA-NY's services and reimbursement of expenses approved by the Adviser
shall be made monthly, in arrears, by the 15th day of the following month.
11. Term. This Agreement shall become effective on the later of January 1, 2001
or the first business day after the date this Agreement is approved in
accordance with the 1940 Act (provided that it is reflected in an effective
post-effective amendment under the Securities Act of 1933 and the 1940
Act). Unless sooner terminated as hereunder provided, it shall initially
remain in effect for a period not exceeding two years. Thereafter, subject
to the termination provisions herein, this Agreement shall continue in
force from year to year thereafter, but only as long as such continuance is
specifically approved at least annually in the manner required by the 1940
Act; provided, however, that if the continuation of this Agreement is not
approved, DSA-NY may continue to serve in the manner and to the extent
permitted by the 1940 Act and the rules and regulations thereunder.
12. Termination. This Agreement shall automatically terminate immediately in
the event of its assignment (except as otherwise permitted by the 1940 Act
or rules thereunder) or in the event of the termination of the Investment
Advisory Agreement. This Agreement may be terminated without payment of any
penalty at any time (a) upon sixty (60) days' written notice to DSA-NY by
the Adviser or upon such sixty (60) days' written notice to DSA-NY by the
Fund pursuant to action by its Board of Directors or by the vote of a
majority of the outstanding voting securities of the Fund, or (b) upon
sixty (60) days' written notice by DSA-NY to the Adviser. The terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth in the 1940 Act and the rules and
regulations thereunder. Termination of this Agreement shall not affect
DSA-NY's right to receive payments on any unpaid balance of the
compensation earned and reimbursable expenses incurred prior to such
termination. Upon receipt of notification of termination as provided above
DSA-NY shall immediately cease all activities in connection with the Fund
except as otherwise directed by the Adviser.
13. Use of Names. DSA-NY agrees that it shall abide by the terms of the
agreement of the Adviser with the Fund as to the names of the Fund and the
Adviser and shall not use the name of the Adviser or the Fund without the
prior written consent of the Adviser or the Fund.
14. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute or rule or otherwise, the remainder
shall not be thereby affected.
15. Choice of Law. This Agreement shall be construed according to the laws of
the State of New Mexico. It may be executed in counterparts, each of which
shall be deemed an original, and all of which together shall constitute one
and the same agreement.
If the foregoing terms and conditions are acceptable to you, please acknowledge
in the space provided. Upon your acceptance, the retention and the mutual
obligations in respect thereto shall be effective as provided herein.
Sincerely,
Davis Selected Advisers, L.P.
By: Davis Investments, LLC
General Partner
By:
--------------------------
Its:
-------------------------
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
Accepted and Approved this 1st day of January, 2001
Davis Selected Advisers - NY, Inc.
By:
--------------------------
Its:
-------------------------
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
SELECTED CAPITAL PRESERVATION TRUST
SUB-ADVISORY AGREEMENT
JANUARY 1, 2001
This is to confirm that Davis Selected Advisers, L.P. (the "Adviser"), is
retaining Davis Selected Advisers - NY, Inc. ("DSA-NY"), as investment
sub-adviser for the portfolios of Selected Capital Preservation Trust (the
"Fund").
The terms and conditions of your retention are as follows:
1. Service as Sub-Adviser. DSA-NY shall act as an investment sub-adviser for
the Fund and will provide such investment management and research services
as the Adviser shall request subject to the general supervision of the
Board of Trustees of the Fund, the Adviser, and to any applicable
provisions as in effect from time to time of (a) the Articles of
Incorporation and Bylaws of the Fund, (b) the prospectus, Statement of
Additional Information and other information set forth in the Fund's
registration documents under the Securities Act of 1933 and the Investment
Company Act of 1940 ("1940 Act"), including any supplements thereto, (c)
the Investment Advisory Agreement between the Adviser and the Fund (the
"Investment Advisory Agreement"), the Adviser's and the Fund's Code of
Ethics and (d) any additional policies or guidelines established by the
Fund's Board of Trustees or the Adviser. DSA-NY acknowledges receipt of
copies of the above documents as in effect on the date of acceptance of
this letter. The Adviser agrees that it will promptly deliver to DSA-NY any
amendments, changes or additions of or to these documents.
2. Conformance to Guidelines. DSA-NY agrees that all securities transactions
will conform to (a) the stated objectives and policies of the Fund, (b) the
brokerage policies set forth in the Investment Advisory Agreement (which
are hereby incorporated by reference herein) and the registration
documents, and (c) those investment and brokerage policies or guidelines
directed by the Board of Trustees of the Fund, any committee thereof and
the Adviser.
3. Independent Contractor. DSA-NY shall be an independent contractor. Unless
otherwise expressly provided or authorized hereunder, or by the Board of
Trustees of the Fund, DSA-NY shall have no authority to represent the Fund
or the Adviser in any way or otherwise be an agent of the Adviser or the
Fund, except with regard to the execution of securities transactions on
behalf of the Fund with registered broker/dealers, including broker/dealers
affiliated with the Adviser, provided transactions with affiliated
broker/dealers comply with Rule 17e-1 of the 1940 Act.
4. Reports and Documentation. DSA-NY shall provide the Adviser with any
reports, analyses or other documentation the Adviser requests including
those related to placement of security transactions, its administrative
responsibilities and its responsibility to monitor compliance with stated
investment objectives, policies and limitations and the investment
performance of the Fund. DSA-NY agrees, directly or through an agent, to
provide daily information in respect to any portfolio transactions of the
Fund to the Adviser. DSA-NY agrees to provide all documentation reasonably
required by the Adviser to maintain the Fund's accounting records in
accordance with the 1940 Act and the Investment Advisers Act of 1940 and
the regulations issued thereunder, and to preserve copies of all documents
and records related to asset transactions, positions and valuations related
to the Fund in the manner and for the periods prescribed by such
regulations. DSA-NY further agrees that all documents and records it
maintains relating to the Fund are the property of the Fund and will be
surrendered to the Adviser or the Fund upon the request of either. DSA-NY
agrees to provide information and to allow inspection of such documents and
records at reasonable times by any authorized representative of the
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
Adviser, the Fund's Board of Trustees or any committee thereof, the Fund's
independent public accountants or appropriate regulatory authorities.
DSA-NY shall provide to the Adviser a copy of its Form ADV as filed with
the SEC and as amended from time to time and a written list of persons
DSA-NY has authorized to give written and/or oral instructions to the
Adviser and the Fund custodian.
5. Access to Personnel. DSA-NY agrees to make its personnel who are engaged in
activities on behalf of the Fund available at reasonable times for
consultations with the Adviser's personnel and the Fund's Board of Trustees
or any committee thereof, including attendance at their meetings, wherever
situated. In addition, personnel of DSA-NY, at the request of the Adviser,
will attend other meetings to be scheduled at mutually convenient times.
6. Facilities, Equipment, and Personnel. DSA-NY agrees to provide all office
facilities, equipment and personnel needed for carrying out its duties
hereunder at its own expense. In addition, DSA-NY shall, if requested by
the Adviser or the Fund, employ at its own expense and subject to the prior
written approval of the Adviser which approval shall not be unreasonably
withheld (i) a public auditing firm, (ii) attorneys, and (iii) such other
professional staff as in the sole discretion of the Adviser are necessary
to assure the fulfillment of the terms and conditions of this agreement.
7. Non-Exclusive. It is agreed that DSA-NY's services are not to be deemed
exclusive and DSA-NY shall be free to render similar services or other
services to others provided that (i) its services hereunder are not
impaired and are not in violation of federal or state securities laws and
(ii) that it shall not provide services to any registered investment
company other than the Fund or other investment companies managed by the
Adviser without the Adviser's prior express written permission.
8. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties hereunder,
DSA-NY, its officers, directors and employees shall not be subject to
liability for any act or omission in the cause of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security. In the event of any claim,
arbitration, suit, or administrative proceedings in which DSA-NY or the
Adviser is a party and in which it is finally determined that there is
liability or wrongdoing by only one of us, the party liable or found to be
the wrongdoer shall pay for all liability and expenses of such claim or
proceeding including reasonable attorneys' fees. If it is determined that
there is liability or wrongdoing by both or none of us, then each shall pay
their own liability and expenses. In the event of any settlement of any
such claim, arbitration, suit or proceeding before final determination by a
court or arbitrator(s), the liability and expenses shall be assumed as
agreed between the parties, but if there is no agreement within thirty (30)
days of such settlement, then the assumption of liability and expenses
shall be settled by arbitration, in accordance with the then applicable
rules of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator shall be final and binding and may be entered in
any court having jurisdiction. The parties shall pay for their own costs
and expenses in respect to any such arbitration and such costs may be
included in the arbitrator's award.
9. Compliance with Applicable Law. As investment sub-adviser, DSA-NY
understands that it will be responsible for complying with all provisions
of applicable law, including the 1940 Act, the Investment Advisers Act of
1940, and the Insider Trading and Securities Fraud Enforcement Act of 1988
and all rules and regulations thereunder. DSA-NY agrees to adopt and comply
with the "Code of Ethics of and for Davis Selected Advisers, L.P. and the
Companies For Which It Acts As Investment Adviser" as in effect from time
to time and to keep in effect a policy and supervisory procedures designed
to prevent insider trading.
10. Common Control, Fees. The parties acknowledge that DSA-NY is controlled by
or under common control with the Adviser. The Adviser shall pay DSA-NY all
reasonable direct and indirect costs associated with the maintenance of an
office and the performance of the terms of this Agreement. The Adviser
shall also reimburse
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
expenses expressly approved for reimbursement by the Adviser. Payment for
DSA-NY's services and reimbursement of expenses approved by the Adviser
shall be made monthly, in arrears, by the 15th day of the following month.
11. Term. This Agreement shall become effective on the later of January 1, 2001
or the first business day after the date this Agreement is approved in
accordance with the 1940 Act (provided that it is reflected in an effective
post-effective amendment under the Securities Act of 1933 and the 1940
Act). Unless sooner terminated as hereunder provided, it shall initially
remain in effect for a period not exceeding two years. Thereafter, subject
to the termination provisions herein, this Agreement shall continue in
force from year to year thereafter, but only as long as such continuance is
specifically approved at least annually in the manner required by the 1940
Act; provided, however, that if the continuation of this Agreement is not
approved, DSA-NY may continue to serve in the manner and to the extent
permitted by the 1940 Act and the rules and regulations thereunder.
12. Termination. This Agreement shall automatically terminate immediately in
the event of its assignment (except as otherwise permitted by the 1940 Act
or rules thereunder) or in the event of the termination of the Investment
Advisory Agreement. This Agreement may be terminated without payment of any
penalty at any time (a) upon sixty (60) days' written notice to DSA-NY by
the Adviser or upon such sixty (60) days' written notice to DSA-NY by the
Fund pursuant to action by its Board of Trustees or by the vote of a
majority of the outstanding voting securities of the Fund, or (b) upon
sixty (60) days' written notice by DSA-NY to the Adviser. The terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth in the 1940 Act and the rules and
regulations thereunder. Termination of this Agreement shall not affect
DSA-NY's right to receive payments on any unpaid balance of the
compensation earned and reimbursable expenses incurred prior to such
termination. Upon receipt of notification of termination as provided above
DSA-NY shall immediately cease all activities in connection with the Fund
except as otherwise directed by the Adviser.
13. Use of Names. DSA-NY agrees that it shall abide by the terms of the
agreement of the Adviser with the Fund as to the names of the Fund and the
Adviser and shall not use the name of the Adviser or the Fund without the
prior written consent of the Adviser or the Fund.
14. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute or rule or otherwise, the remainder
shall not be thereby affected.
15. Choice of Law. This Agreement shall be construed according to the laws of
the State of New Mexico. It may be executed in counterparts each of which
shall be deemed an original and all of which together shall constitute one
and the same agreement.
If the foregoing terms and conditions are acceptable to you, please acknowledge
in the space provided. Upon your acceptance, the retention and the mutual
obligations in respect thereto shall be effective as provided herein.
Sincerely,
Davis Selected Advisers, L.P.
By Davis Investments, LLC
General Partner
By:
--------------------------
Its:
-------------------------
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
Accepted and Approved this 1st day of January, 2001
Davis Selected Advisers - NY, Inc.
By:
--------------------------
Its:
-------------------------
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
Davis Selected Advisers, L.P.
2949 East Elvira Road, Suite 101 o Tucson, Arizona 85706 o (800) 279-2279
January 1, 2001
Bramwell Capital Management, Inc.
745 Fifth Avenue, 16th Floor
New York NY 10151
Re: Sub-Advisory Agreement for Selected Special Shares, Inc.
Gentlemen:
This is to confirm that Davis Selected Advisers, L.P. ("DSA") is retaining you
as investment sub-adviser for the portfolio of the Selected Special Shares, Inc.
("the Fund").
This letter sets forth the terms and conditions of your retention. If they are
acceptable to you, please acknowledge in the space provided. Upon your
acceptance, the retention and the mutual obligations in respect thereto shall be
effective as provided herein. The terms and conditions are as follows:
1. Service as Sub-Adviser. You shall act as the investment sub-adviser for the
Fund and will manage the investment and reinvestment of the assets of the
Fund subject to the supervision of the Board of Directors of the Fund and
to any applicable provisions as in effect from time to time of (a) the
Articles of Incorporation and Bylaws of the Fund, (b) the prospectus,
Statement of Additional Information and other information set forth in the
Fund's registration documents under the Securities Act of 1933 and the
Investment Company Act of 1940 ("1940 Act"), including any supplements
thereto, and (c) the Investment Advisory Agreement between the undersigned
and the Fund (the "Investment Advisory Agreement") in respect to the Fund
and the Fund's Code of Ethics. You acknowledge that you have received
copies of the above documents as in effect on the date of your acceptance
of this letter. The undersigned agrees that it will promptly deliver to you
any amendments, changes or additions of or to these documents. Without
limitation, you agree that all securities transactions will conform to (a)
the stated objectives and policies of the Fund, (b) the brokerage policies
set forth in the Investment Advisory Agreement (which are hereby
incorporated by reference herein) and the registration documents, and (c)
those investment and brokerage policies or guidelines directed by the Board
of Directors of the Fund or any committee thereof. You shall be an
independent contractor. Unless otherwise expressly provided or authorized
hereunder, or by the Board of Directors of the Fund, you have no authority
to represent the Fund in any way or otherwise be an agent of the Fund. You
shall also not represent or be the agent of the undersigned except as
expressly provided or authorized hereunder or as authorized by the
undersigned in any other writing.
2. Reports and Documents. You agree to provide DSA with any reasonable
reports, analyses or other documentation DSA requires to carry out its
responsibilities under its Investment Advisory Agreement with the Fund
including those related to placement of security transactions, its
administrative responsibilities and its responsibility to monitor
compliance with stated investment objectives, policies and limitations and
the investment performance of the Fund. You agree, directly or through an
agent, to provide daily information in
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
respect to the portfolio transactions of the Fund to DSA. You agree to
provide all documentation reasonably required by DSA to maintain the Fund's
accounting records in accordance with the 1940 Act and the Investment
Advisers Act of 1940 and the regulations issued thereunder, and to preserve
copies of all documents and records related to asset transactions,
positions and valuations related to the Fund in the manner and for the
periods prescribed by such regulations. You agree that all documents and
records you maintain in respect to the Fund, exclusively relating to the
Fund, are the property of the Fund and will be surrendered to DSA or the
Fund upon the request of either. You agree to provide information and to
allow inspection of such documents and records at reasonable times by any
authorized representative of DSA, the Fund's Board of Directors or any
committee thereof, the Fund's independent public accountants or the
appropriate regulatory authorities.
3. Access to Personnel. You agree to make your personnel who are engaged in
activities on behalf of the Fund available at reasonable times for
consultations with DSA personnel and the Fund's Board of Directors or any
committee thereof, including attendance at their meetings, wherever
situated in the United States. Travel, meals and lodging expenses shall be
reimbursed.
4. Facilities, Equipment and Personnel. You agree to provide all office
facilities, equipment and personnel for carrying out your duties hereunder
at your own expense except as specifically provided hereunder.
5. Non-Exclusive Services, Liability. It is agreed that your services are not
to be deemed exclusive and you shall be free to render similar services or
other services to others provided that (i) your services hereunder are not
impaired and are not in violation of federal or state securities laws and
(ii) that you shall be allowed to provide services to any registered
investment company other than the Fund without our express written
permission by giving the Fund sixty (60) days written notice prior to the
effective date that such other registered investment company shall be
offered to the public, provided that you have our express permission to
provide services to the Bramwell Funds without such notice. In the absence
of willful misfeasance, bad faith, gross negligence or reckless disregard
of your obligations or duties hereunder, you shall not be subject to
liability for any act or omission in the cause of, or connected with,
rendering service hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security. In the event of any claim,
arbitration, suit, or administrative proceedings in which you or DSA is a
party and in which it is finally determined that there is liability or
wrongdoing by only one of us, the party liable or found to be the wrongdoer
shall pay for all liability and expenses of such claim or proceeding
including reasonable attorneys' fees. If it is determined that there is
liability or wrongdoing by both or none of us, then each of us shall pay
their own liability and expenses. In the event of any settlement of any
such claim, arbitration, suit or proceeding before final determination by a
court or arbitrator(s), the liability and expenses shall be assumed as
agreed between the parties, but if there is no agreement within thirty (30)
days of such settlement, then the assumption of liability and expenses
shall be settled by arbitration, in accordance with the then applicable
rules of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator shall be final and binding and may be entered in
any court having jurisdiction. The parties shall pay for their own costs
and expenses in respect to any such arbitration and may be included in the
arbitrator's award.
6. Compliance with Applicable Law. As investment sub-adviser, you understand
that you will be responsible for complying with all provisions of
applicable law, including the 1940 Act, the Investment Advisers Act of 1940
and the Insider Trading and Securities Fraud Enforcement Act of 1988 and
all rules and regulations thereunder. You agree to adopt and comply with
the "Code of Ethics of and for Davis Selected Advisers, L.P. and the
Companies For Which It Acts As Investment Adviser" as in effect from time
to time (or Bramwell Capital Management's Code of Ethics if such Code is
approved by the Fund's Board of Directors and is in accordance with all
applicable laws and regulations, including any rules, regulations or
guidelines of any self-regulatory agency or trade association of which the
Fund or DSA is a member) and to keep in effect a policy and supervisory
procedures designed to prevent insider trading.
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
7. Fees. DSA shall pay to you a portion of the fee it receives from the Fund
under the Investment Advisory Agreement, based on the attached fee schedule
and reimburse expenses expressly approved for reimbursement by DSA. Payment
for your services and reimbursement of expenses approved by DSA shall be
made monthly. From time to time, with your express written approval, DSA
may waive any part or all of the fees due to it under the Investment
Advisory Agreement for the period specified in such writing. Such approval
shall constitute a waiver by you of your portion of the waived fees.
8. Term. This Agreement shall become effective on the later of January 1,
2001, or the first business day after the date this Agreement is approved
in accordance with the 1940 Act. Unless sooner terminated as hereunder
provided, it shall initially remain in effect until January 1, 2003.
Thereafter, subject to the termination provisions herein, this Agreement
shall continue in force from year to year thereafter, but only as long as
such continuance is specifically approved at least annually in the manner
required by the 1940 Act; provided, however, that if the continuation of
this Agreement is not approved, you may continue to serve in the manner and
to the extent permitted by the 1940 Act and the rules and regulations
thereunder.
9. Termination. This Agreement shall automatically terminate immediately in
the event of its assignment (except as otherwise permitted by the 1940 Act
or rules thereunder) or in the event of the termination of the Investment
Advisory Agreement. This Agreement may be terminated without payment of any
penalty at any time (a) upon sixty (60) days' written notice to you by DSA
or upon such sixty (60) days' written notice to you by the Fund pursuant to
action by the Board of Directors of the Fund or by the vote of a majority
of the outstanding voting securities of the Fund, or (b) upon sixty (60) or
more days' written notice by you to DSA and the Fund. The terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth in the 1940 Act and the rules and
regulations thereunder. Termination of this Agreement shall not affect your
right to receive payments on any unpaid balance of the compensation earned
and reimbursable expenses incurred prior to such termination.
10. Choice of Law. The Agreement shall be construed according to the laws of
the State of New Mexico. It may be executed in counterparts each of which
shall be deemed an original and all of which together shall constitute one
and the same agreement.
Yours very truly,
Davis Selected Advisers, L.P.
By Davis Investments, LLC
General Partner
By:
-------------------------
Accepted and Approved this
1st day of January, 2001
BRAMWELL CAPITAL MANAGEMENT, INC.
By:
-------------------------------------
<PAGE>
APPENDIX G:
--------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - SELECTED FUNDS (CONT.)
SUB-ADVISORY FEE SCHEDULE FOR BRAMWELL CAPITAL MANAGEMENT
1) 50% of total management fees paid by the Fund to Davis Selected Advisers,
L.P., reduced by 50% of any trail commissions paid to dealers by Davis
Selected Advisers, L.P., in excess of 25 basis points per annum.
2) Minimum annual fees - $150,000.
<PAGE>
APPENDIX H:
--------------------------------------------------------------------------------
MOST RECENT SHAREHOLDER APPROVALS OF EXISTING
ADVISORY AND SUB-ADVISORY AGREEMENTS
ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
EXISTING ADVISORY AGREEMENTS DATE LAST SUBMITTED TO VOTE PURPOSE
OF SHAREHOLDERS
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED AMERICAN SHARES August 19, 1993 Approving a change in the Adviser
SELECTED SPECIAL SHARES August 19, 1993 Approving a change in the Adviser
SELECTED CAPITAL PRESERVATION TRUST August 19, 1993 Approving a change in the Adviser
</TABLE>
SUB-ADVISORY AGREEMENTS WITH
DAVIS SELECTED ADVISERS - NY, INC.
<TABLE>
<CAPTION>
EXISTING SUB-ADVISORY AGREEMENTS DATE LAST SUBMITTED TO VOTE PURPOSE
OF SHAREHOLDERS
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED AMERICAN SHARES March 25, 1997 Initial approval of agreement
SELECTED SPECIAL SHARES March 25, 1997 Initial approval of agreement
SELECTED CAPITAL PRESERVATION TRUST March 25, 1997 Initial approval of agreement
</TABLE>
SUB-ADVISORY AGREEMENT WITH
BRAMWELL CAPITAL MANAGEMENT, INC.
<TABLE>
<CAPTION>
EXISTING SUB-ADVISORY AGREEMENT DATE LAST SUBMITTED TO VOTE OF PURPOSE
SHAREHOLDERS
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED SPECIAL SHARES November 1, 1994 Initial approval of agreement
</TABLE>
<PAGE>
APPENDIX I:
--------------------------------------------------------------------------------
INVESTMENT COMPANIES WITH INVESTMENT OBJECTIVES SIMILAR TO THE SELECTED FUNDS
FOR WHICH DAVIS SELECTED ADVISERS, L.P., SERVES AS INVESTMENT ADVISER
<TABLE>
<CAPTION>
FUND MANAGEMENT FEES PAID AS AN ANNUAL % OF NET ASSETS*
NET ASSETS
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LARGE CAP EQUITY FUNDS
Davis New York Venture Fund 0.53% $14,515,157,707
Davis Value Portfolio 0.75% $12,667,884
MID CAP FUND
Davis Growth Opportunity Fund 0.75% $125,151,222
GOVERNMENT BOND FUND
Davis Government Bond Fund 0.50% $51,154,278
GOVERNMENT MONEY MARKET FUND
Government Money Market Fund 0.47% $553,976,919
</TABLE>
* As of the most recently completed fiscal year
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES
Each Selected Fund operates in accordance with the investment objectives,
policies and restrictions described in its prospectus and Statement of
Additional Information.
Each Selected Fund which approves all elements of Proposal 3 will adopt the
fundamental investment policies set forth below, which may not be changed
without a shareholder vote. Where necessary, an explanation beneath a
fundamental policy describes the Fund's practices with respect to that policy,
as allowed by current law. If the law governing a policy changes, the Fund's
practices may change accordingly without a shareholder vote.
Except for the fundamental investment policies regarding illiquid securities and
borrowing, all percentage restrictions apply as of the time of an investment
without regard to any later fluctuations in the value of portfolio securities or
other assets. All references to the assets of the Fund are in terms of current
market value.
A. DIVERSIFICATION
The New Fundamental Policy on Diversification for all Selected Funds would be:
DIVERSIFICATION. The Fund may not make any investment that is inconsistent with
its classification as a diversified investment company under the 1940 Act.
FURTHER EXPLANATION OF DIVERSIFICATION POLICY. To remain classified as a
diversified investment company under the 1940 Act, the Fund must conform with
the following: With respect to 75% of its total assets, a diversified investment
company may not invest more than 5% of its total assets, determined at market or
other fair value at the time of purchase, in the securities of any one issuer,
or invest in more than 10% of the outstanding voting securities of any one
issuer, determined at the time of purchase. These limitations do not apply to
investments in securities issued or guaranteed by the United States ("U.S.")
government or its agencies or instrumentalities.
B. CONCENTRATION
The New Fundamental Policy on Concentration for all Selected Funds would be:
CONCENTRATION. The Fund may not concentrate its investments in the securities of
issuers primarily engaged in any particular industry.
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES (CONT.)
FURTHER EXPLANATION OF CONCENTRATION POLICY. The Fund may not invest 25% or more
of its total assets, taken at market value, in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities).
C. SENIOR SECURITIES
The New Fundamental Policy on Issuing Senior Securities for all Selected Funds
would be:
ISSUING SENIOR SECURITIES. The Fund may not issue senior securities, except as
permitted under applicable law, including the 1940 Act and published SEC staff
positions.
FURTHER EXPLANATION OF ISSUING SENIOR SECURITIES. The Fund may not issue senior
securities nor sell short more than 5% of its total assets, except as provided
by the 1940 Act and any rules, regulations or orders issued thereunder. This
limitation does not apply to selling short against the box. The 1940 Act defines
a "Senior Security" as any bond, debenture, note, or similar obligation
constituting a security and evidencing indebtedness.
D. BORROWING
The New Fundamental Policy on Borrowing for All Selected Funds would be:
BORROWING. The Fund may not borrow money, except to the extent permitted by
applicable law, including the 1940 Act and published SEC staff positions.
FURTHER EXPLANATION OF BORROWING POLICY. The Fund may borrow from banks and
enter into reverse repurchase agreements in an amount up to 33 1/3% of its total
assets, taken at market value. The Fund may also borrow up to an additional 5%
of its total assets from banks or others. The Fund may borrow only as a
temporary measure for extraordinary or emergency purposes such as the redemption
of Fund shares. The Fund may purchase additional securities so long as
borrowings do not exceed 5% of its total assets. The Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities. In the event that market fluctuations cause borrowing
to exceed the limits stated above, the Adviser would act to remedy the situation
as promptly as possible (normally within 3 business days), although it is not
required to dispose of portfolio holdings immediately if the Fund would suffer
losses as a result.
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES (CONT.)
E. UNDERWRITING
The New Fundamental Policy on Underwriting for All Selected Funds would be:
UNDERWRITING. The Fund may not underwrite securities of other issuers, except to
the extent permitted by applicable law, including the 1940 Act and published SEC
staff positions.
FURTHER EXPLANATION OF UNDERWRITING POLICY. The Fund may not underwrite
securities of other issuers, except insofar as the Fund may be deemed to be an
underwriter in connection with the disposition of its portfolio securities.
F. COMMODITIES AND REAL ESTATE
The New Fundamental Policy for All Selected Funds Regarding Investments in
Commodities and Real Estate would be:
INVESTMENTS IN COMMODITIES AND REAL ESTATE. The Fund may not purchase or sell
commodities or real estate, except to the extent permitted by applicable law,
including the 1940 Act and published SEC staff positions.
FURTHER EXPLANATION OF POLICY RESTRICTING INVESTMENTS IN COMMODITIES AND REAL
ESTATE. The Fund may purchase or sell financial futures contracts, options on
financial futures contracts, currency contracts, and options on currency
contracts as described in its prospectus and Statement of Additional
Information. The Fund may not purchase or sell real estate, except that the Fund
may invest in securities that are directly or indirectly secured by real estate,
or securities issued by issuers that invest in real estate.
G. LOANS
The New Fundamental Policy for All Selected Funds Regarding Making Loans would
be:
MAKING LOANS. The Fund may not make loans to other persons, except as allowed by
applicable law, including the 1940 Act and published SEC staff positions.
FURTHER EXPLANATION OF LENDING POLICY. The acquisition of investment securities
or other investment instruments is not deemed to be the making of a loan.
To generate income and offset expenses, the Fund may lend portfolio securities
to broker-dealers and other financial institutions which the Adviser believes to
be creditworthy in an amount up to 33 1/3% of its total assets, taken at market
value. While securities are on
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES (CONT.)
loan, the borrower will pay the Fund any income accruing on the security. The
Fund may invest any collateral it receives in additional portfolio securities,
such as U.S. Treasury notes, certificates of deposit, other high-grade,
short-term obligations or interest-bearing cash equivalents. The Fund is still
subject to gains or losses due to changes in the market value of securities
which it has lent.
When the Fund lends its securities, it will require the borrower to give the
Fund collateral in cash or government securities. The Fund will require
collateral in an amount equal to at least 100% of the current market value of
the securities lent, including accrued interest. The Fund has the right to call
a loan and obtain the securities lent any time on notice of not more than five
business days. The Fund may pay reasonable fees in connection with such loans.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES
SELECTED AMERICAN SHARES FUNDAMENTAL INVESTMENT POLICIES
THE FUND MAY NOT:
1. DIVERSIFICATION. Purchase securities of any one issuer (excluding U.S.
Government Securities) if, as a result of such purchase, the Fund would own
more than 10% of the total outstanding securities or voting stock of the
issuer or more than 5% of the value of the Fund's total assets would be
invested in the securities of the issuer.
2. CONCENTRATION. Concentrate more than 25% of its assets in securities of any
one industry.
3. REAL ESTATE, COMMODITIES, MINERALS. Purchase or sell real estate or
interests in real estate, commodities or commodity contracts or interests
in oil, gas or other mineral exploration or development programs. It may,
however, purchase marketable securities of companies which may make such
investments.
4. BORROWING. Borrow money, except for temporary or emergency purposes, and
then only from banks, in an amount not exceeding 10% of the value of the
Fund's total assets. The Fund will not borrow money for the purpose of
investing in securities, and the Fund will not purchase any portfolio
securities for so long as any borrowed amounts remain outstanding.
5. UNDERWRITING. Underwrite securities of other issuers (although the Fund may
technically be considered an underwriter if it sells restricted
securities).
6. LOANS. Make loans, except it may acquire debt securities from the issuer or
others which are publicly distributed or are of a type normally acquired by
institutional investors and except that it may make loans of portfolio
securities if any such loans are secured continuously by collateral at
least equal to the market value of the securities loaned in the form of
cash and/or securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities and provided that no such loan will be made
if upon the making of that loan more than 10% of the value of the Fund's
total assets would be the subject of such loans.
7. SENIOR SECURITIES. Issue senior securities nor sell short more than 5% of
its total assets, except as provided by the Investment Company Act of 1940
and any rules, regulations or orders issued thereunder. This limitation
does not apply to selling short against the box.
8. SELLING SHORT, MARGIN, OPTIONS. Sell short, buy on margin, or deal in
options, except that the Fund may write call options against its portfolio
securities which are traded on a national securities exchange and purchase
call options in closing transactions. (When permitted by applicable federal
and state authorities and when there exists an established market for call
options written on securities traded otherwise than on a national
securities exchange, the Fund may also issue call options on such portfolio
securities and purchase such call options on such securities in closing
transactions.) The Fund will not write a covered option if following
issuance of the option the market value of the Fund's portfolio securities
underlying such options would be in excess of 20% of the value of the
Fund's net assets.
9. PLEDGING OR HYPOTHECATION. Pledge or hypothecate its assets, except in an
amount not exceeding 15% of its total assets, and then only to secure
borrowings for temporary or emergency purposes.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
10. OTHER INVESTMENT COMPANIES. Invest in other investment companies (as
defined in the Investment Company Act of 1940), except as part of a merger,
consolidation, reorganization or acquisition of assets.
11. ILLIQUID SECURITIES. Purchase illiquid securities (including restricted
securities that are illiquid) if such purchase would cause more than 15% of
the value of the Fund's net assets to be invested in such securities. This
one investment restriction must be observed on an ongoing basis, not just
at the time of purchase.
12. ASSOCIATED PERSONS. Allow any person associated with the Fund or its
investment manager who is an officer or director of another issuer to
participate in any decision to purchase or sell any securities of such
other issuer.
SELECTED SPECIAL SHARES FUNDAMENTAL INVESTMENT POLICIES
THE FUND MAY NOT:
1. DIVERSIFICATION. Purchase securities of any one issuer (excluding U.S.
Government Securities) if, as a result of such purchase, the Fund would own
more than 10% of the total outstanding securities or voting stock of the
issuer or more than 5% of the value of the Fund's total assets would be
invested in the securities of the issuer.
2. CONCENTRATIONS. Concentrate more than 25% of its assets in securities of
any one industry.
3. REAL ESTATE, COMMODITIES. Purchase or sell real estate, commodities or
commodity contracts, or oil, gas or other mineral exploration or
development programs, or any direct interests therein. It may, however,
purchase marketable securities of companies, which may make such
investments.
4. BORROWING. Borrow money, except for temporary or emergency purposes, and
then only from banks, in an amount not exceeding 10% of the value of the
Fund's total assets. The Fund will not borrow money for the purpose of
investing in securities, and the Fund will not purchase any portfolio
securities for so long as any borrowed amounts remain outstanding.
5. UNDERWRITING. Underwrite securities of other issuers (although the Fund may
technically be considered an underwriter if it sells restricted
securities).
6. LOANS. Make loans, except it may acquire debt securities from the issuer or
others which are publicly distributed or are of a type normally acquired by
institutional investors and except that it may make loans of portfolio
securities if any such loans are secured continuously by collateral at
least equal to the market value of the securities loaned in the form of
cash and/or securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities and provided that no such loan will be made
if upon the making of that loan more than 10% of the value of the Fund's
total assets would be the subject of such loans.
7. SENIOR SECURITIES. Issue senior securities nor sell short more than 5% of
its total assets, except as provided by the Investment Company Act of 1940
and any rules, regulations or orders issued thereunder. This limitation
does not apply to selling short against the box.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
8. SELLING SHORT, MARGIN, OPTIONS. Sell short, buy on margin, or deal in
options, except that the Fund may write call options against its portfolio
securities which are traded on a national securities exchange and purchase
call options in closing transactions. (When permitted by applicable federal
and state authorities and when there exists an established market for call
options written on securities traded otherwise than on a national
securities exchange, the Fund may also issue call options on such portfolio
securities and purchase such call options on such securities in closing
transactions.) The Fund will not write a covered option if following
issuance of the option the market value of the Fund's portfolio securities
underlying such options would be in excess of 10% of the value of the
Fund's net assets.
9. PLEDGING OR HYPOTHECATION. Pledge or hypothecate its assets, except in an
amount not exceeding 15% of its total assets, and then only to secure
borrowings for temporary or emergency purposes.
10. OTHER INVESTMENT COMPANIES. Purchase securities of any other investment
company (as defined in the Investment Company Act of 1940) except: (i)
shares of investment companies investing primarily in foreign securities
provided that such purchase does not cause the Fund to (a) have more than
5% of its total assets invested in any one such company, (b) have more than
10% of its total assets invested in the aggregate of all such companies, or
(c) own more than 3% of the total outstanding voting stock of any such
company; and (ii) as a part of a merger, consolidation, reorganization or
acquisition of assets.
11. ILLIQUID SECURITIES. Purchase illiquid securities (including restricted
securities that are illiquid) if such purchase would cause more than 15% of
the value of the Fund's net assets to be invested in such securities.
SELECTED U.S. GOVERNMENT INCOME FUND FUNDAMENTAL INVESTMENT POLICIES
THE FUND MAY NOT:
1. DIVERSIFICATION. Buy the securities of any company if more than 5% of the
value of the Fund's total assets would be invested in that company.
Securities issued by the U.S. Government, or its agencies or
instrumentalities and repurchase agreements involving such securities
("U.S. Government Securities") are excluded from this restriction.
2. CONCENTRATION. Invest 25% or more of its total assets in any one industry,
except that this restriction shall not apply to U.S. Government Securities.
3. REAL ESTATE, COMMODITIES. Purchase or sell real estate, real estate
mortgage loans, commodities or commodity futures contracts, or oil, gas, or
mineral exploration or development interests except that the Fund may
invest in futures contracts and related options as described in the
prospectus and Statement of Additional Information.
4. BORROWING. Borrow money except for temporary or emergency non-investment
purposes, such as to accommodate abnormally heavy redemption requests, and
then only in an amount not exceeding 10% of the value of the Fund's total
assets at the time of borrowing.
5. UNDERWRITING. Underwrite any securities issued by others except to the
extent that, in connection with the disposition of its portfolio
investments, it may be deemed to be an underwriter under certain Federal
securities laws.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
6. LOANS. Make loans, other than (a) by entering into repurchase agreements,
(b) through the purchase of other permitted investments in accordance with
its investment objective and policies, and (c) through the lending of
portfolio securities with respect to not more than 30% of its assets.
7. SENIOR SECURITIES. Issue senior securities as defined in the 1940 Act,
except insofar as the Fund may be deemed to have issued a senior security
by reason of (a) entering into any repurchase agreements; (b) permitted
borrowings of money; (c) purchasing securities on a "when-issued" or
delayed delivery basis; or (d) purchasing options, futures contracts and
related options.
8. SHORT SALES. Make short sales of securities.
9. MARGIN. Purchase securities on margin except that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities and further excepting that the deposit or payment by
the Fund of initial or variation margin in connection with futures
contracts or related options transactions is not to be considered the
purchase of a security on margin.
10. FUTURES CONTRACTS, OPTIONS. Purchase or sell futures contracts or options
on futures contracts if, as a result, the sum of the initial margin
deposits on the Fund's existing futures contracts and related options
positions and the premiums paid for options on futures contracts would
exceed 5% of the fair market value of the Fund's assets after taking into
account unrealized profits and unrealized losses on any such contracts it
has entered into; provided, however, that in the case of an option that is
"in-the-money" at the time of the purchase, the "in-the-money" amount may
be excluded in computing such 5%.
11. PLEDGING, MORTGAGING, HYPOTHECATION. Pledge, mortgage or hypothecate its
assets, except that to secure borrowings permitted by (4) above, it may
pledge securities having a market value at the time of pledge not exceeding
15% of the Fund's total assets; provided, however, that the deposit of
underlying securities and other assets in escrow in connection with the
writing of put or call options and collateral arrangements with respect to
margin for futures contracts and options thereon are not to be considered
pledges or other encumbrances.
12. OTHER INVESTMENT COMPANIES. Invest in securities of other investment
companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets.
13. REPURCHASE AGREEMENTS, ILLIQUID SECURITIES. Enter into a repurchase
agreement maturing in more than seven days, or knowingly purchase
securities that are subject to restrictions on resale or for which there
are no readily available market quotations if, as a result, more than 10%
of the value of the Fund's total assets (taken at current value) at the
time would be invested in such securities.
14. ILLIQUID SECURITIES. Invest more than 10% of its total assets (determined
at the time of investment) in illiquid securities, securities which are not
readily marketable and repurchase agreements which have a maturity of
longer than seven days. In addition, the Fund will not invest more than 5%
of its total assets in securities the disposition of which is restricted
under federal securities laws.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
SELECTED DAILY GOVERNMENT FUND FUNDAMENTAL INVESTMENT POLICIES
THE FUND MAY NOT:
1. DIVERSIFICATION. Purchase securities, if immediately after such purchase
more than 5% of its total assets would be invested in the securities of any
one issuer excluding U.S. Government Securities, and repurchase agreements
with respect to such securities.
2. CONCENTRATION. Invest 25% or more of its total assets in any one industry,
except that this restriction shall not apply to U.S. Government Securities.
3. REAL ESTATE, COMMODITIES. Purchase or sell real estate, real estate
mortgage loans, commodities, commodity contracts (including futures
contracts) or oil and gas interests.
4. BORROWING. Borrow money, except for temporary or emergency non-investment
purposes such as to accommodate abnormally heavy redemption requests, and
then only in an amount not exceeding 10% of the value of its total assets
at the time of borrowing.
5. UNDERWRITING. Underwrite any securities issued by others (except that it
may technically be considered an underwriter if it sells restricted
securities).
6. LOANS. Make loans, other than by entering into repurchase agreements and
through the purchase of other permitted investments in accordance with its
investment objective and policies.
7. SENIOR SECURITIES. Issue any class of securities senior to any other class
of securities.
8. SELLING SHORT, MARGIN. Sell securities short or purchase any securities on
margin, except for such short-term credits as are necessary for clearance
or portfolio transactions.
9. OPTIONS. Write, purchase or sell put or call options.
10. PLEDGING, MORTGAGING, HYPOTHECATION. Pledge, mortgage or hypothecate its
assets, except that to secure borrowings permitted by (3) above, it may
pledge securities having a market value at the time of pledge not exceeding
15% of its total assets.
11. OTHER INVESTMENT COMPANIES. Invest in securities of other investment
companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets.
12. REPURCHASE AGREEMENTS, ILLIQUID SECURITIES. Enter into a repurchase
agreement maturing in more than seven days or knowingly purchase securities
that are subject to restrictions on resale or for which there are no
readily available market quotations if, as a result of such purchase more
than 10% of a Fund's assets would be invested in such securities.
<PAGE>
SELECTED DAILY GOVERNMENT FUND
This proxy is solicited on behalf of the
Board of Directors of Selected Daily Government Fund
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 12 noon Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/ssgtx
Enter your control number listed on the reverse side of this card. Each
card has a control number. Follow the instructions on the screen. If you
received more than one proxy card, you will have to vote each card
separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number. Follow the instructions as spoken. If you
received more than one proxy card, you will have to vote each card
separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week) Read both sides
of this proxy card. Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service) Please complete the reverse side
of this proxy card. Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
SELECTED DAILY GOVERNMENT FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy Date Proposal below.
Date
----------------------------------- ----------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) William P. Barr, (02) Floyd A. Brown,
(03) Andrew A. Davis, (04) Christopher C. Davis, (05) Jerome E. Hass, (06)
Katherine L. MacWilliams, (07) James J. McMonagle, (08) Richard C. O'Brien,
(09) Larry J.B. Robinson, (10) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ]
----------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and with Davis Selected Advisers - NY, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ]
----------------------------------------------------
<PAGE>
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options and Future Contracts.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
SELECTED U.S. GOVERNMENT INCOME FUND
This proxy is solicited on behalf of the
Board of Directors of Selected U.S. Government Income Fund
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 12 noon Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/ssgtx
Enter your control number listed on the reverse side of this card. Each
card has a control number. Follow the instructions on the screen. If you
received more than one proxy card, you will have to vote each card
separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number. Follow the instructions as spoken. If you
received more than one proxy card, you will have to vote each card
separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week) Read both sides
of this proxy card. Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service) Please complete the reverse side
of this proxy card. Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
SELECTED U.S. GOVERNMENT INCOME FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy Date Proposal below.
Date
------------------------------------- -------------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) William P. Barr, (02) Floyd A. Brown,
(03) Andrew A. Davis, (04) Christopher C. Davis, (05) Jerome E. Hass, (06)
Katherine L. MacWilliams, (07) James J. McMonagle, (08) Richard C. O'Brien,
(09) Larry J.B. Robinson, (10) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ]
---------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and with Davis Selected Advisers - NY, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ]
---------------------------------------------------
<PAGE>
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options and Future Contracts.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
SELECTED SPECIAL SHARES
This proxy is solicited on behalf of the
Board of Directors of Selected Special Shares
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 12 noon Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/slssx
Enter your control number listed on the reverse side of this card. Each
card has a control number. Follow the instructions on the screen. If you
received more than one proxy card, you will have to vote each card
separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number. Follow the instructions as spoken. If you
received more than one proxy card, you will have to vote each card
separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week) Read both sides
of this proxy card. Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service) Please complete the reverse side
of this proxy card. Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
SELECTED SPECIAL SHARES
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy below.
Date
----------------------------------- -----------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) William P. Barr, (02) Floyd A. Brown,
(03) Andrew A. Davis, (04) Christopher C. Davis, (05) Jerome E. Hass, (06)
Katherine L. MacWilliams, (07) James J. McMonagle, (08) Richard C. O'Brien,
(09) Larry J.B. Robinson, (10) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ]
-------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and with Davis Selected Advisers - NY, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ]
-------------------------------------------------
<PAGE>
2B. To approve of the Sub-Advisory Agreement with Bramwell Capital Management,
Inc.
For Against Abstain
[ ] [ ] [ ]
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options and Future Contracts.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Other Investment Companies.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
SELECTED AMERICAN SHARES
This proxy is solicited on behalf of the
Board of Directors of Selected American Shares
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 12 noon Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/slasx
Enter your control number listed on the reverse side of this card. Each
card has a control number. Follow the instructions on the screen. If you
received more than one proxy card, you will have to vote each card
separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number. Follow the instructions as spoken. If you
received more than one proxy card, you will have to vote each card
separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week) Read both sides
of this proxy card. Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service) Please complete the reverse side
of this proxy card. Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
SELECTED AMERICAN SHARES
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy Date Proposal below.
Date
--------------------------------- ---------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) William P. Barr, (02) Floyd A. Brown,
(03) Andrew A. Davis, (04) Christopher C. Davis, (05) Jerome E. Hass, (06)
Katherine L. MacWilliams, (07) James J. McMonagle, (08) Richard C. O'Brien,
(09) Larry J.B. Robinson, (10) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ]
-------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and with Davis Selected Advisers - NY, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ]
-------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in
Commodities and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options and Future Contracts.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Other Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3M. Proposal to Eliminate the Fundamental Policy Regarding Investing In
Companies with Affiliated Ownership.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
(Date)
Dear Financial Adviser:
Included in a proxy statement being mailed to all shareholders of Selected Funds
are two proposals that we wanted to explain further to you.
For shareholders of Selected American Shares and Selected Special Fund, we are
requesting that certain of the investment restrictions be broadened. The most
significant relates to our status as a diversified fund. While we would maintain
this status, we would replace the current 5% restriction which prevents
portfolio managers from adding to a holding if it already represents more than
5% of the Fund's assets. In its place, this 5% restriction would apply to 75% of
the portfolio and portfolio managers would be allowed to add to 5% or greater
positions as long as the sum of these does not exceed 25%.
For shareholders in all Selected Funds, they will be requested to vote on a
change in control of the investment adviser, Davis Selected Advisers, L.P.
("DSA"). In essence, a company controlled by Shelby M.C. Davis will transfer to
a company controlled by Christopher Davis the general partnership shares of DSA.
While minor from an economic standpoint, this transfer will result in a change
of control as defined by the Investment Company Act of 1940 and requires
shareholder approval.
We thank you for your continued support.
Sincerely,
Christopher C. Davis
